Kobe Steel plant that supplied plane components being checked

By Sam Nussey and Yuka Obayashi

TOKYO (Reuters) - Japanese authorities are conducting safety checks at a Kobe Steel Ltd aluminium plant that supplied components for a domestically built aircraft and seeking to inspect other plants owned by the embattled company.

Kobe Steel's revelations of widespread tampering in the specifications of its products have sent a chill through global supply chains for cars, trains, airplanes and other equipment. While no safety issues have been identified, the company is the subject of a U.S. Department of Justice inquiry and has said it is losing customers.

The inspection of Kobe Steel's Daian plant in central Japan was focusing on the safety of components being used in Mitsubishi Regional Jet (MRJ) passenger aircraft being developed by Mitsubishi Heavy Industries Ltd, Transport Minister Keiichi Ishii told reporters on Tuesday.

"As a country of design and manufacturing, we have an unmistakable commitment to safety," Ishii said. "We want to be absolutely sure of product safety as the MRJ heads towards mass production."

The repeatedly delayed MRJ is central to the Japanese government's plans to revive an aerospace industry dismantled after World War Two. The aircraft has yet to enter service.

Products with fabricated data have been used in the aircraft, a spokeswoman for Mitsubishi Heavy said on Tuesday, adding no safety issues have been found. There is no impact on testing schedules for the MRJ, she said.

MORE CHECKS

Japan's industry minister also said on Tuesday he was seeking checks on other plants run by Japan's third-largest steelmaker to see whether they were in compliance with statutory industrial standards.

Industry minister Hiroshige Seko told reporters he asked companies that certify whether manufacturers comply with Japanese Industrial Standards (JIS) to consider rechecking all Kobe Steel plants that have the certification.

Twenty Kobe Steel plants, including some overseas, are certified under JIS, an industry ministry official told Reuters by phone. The ministry can carry out its own inspections if Kobe Steel does not open its plants to the certification companies, he said.

A Kobe Steel spokesman said on Tuesday the company is cooperating with the transport ministry inspection and will allow certification companies to carry out their checks if requested.

One of the plants is already being checked, Kobe Steel said on Friday, when it revealed it had found more data fabrication and an attempt to cover up tampering.

Kobe Steel admitted this month it falsified specifications on the strength and durability of aluminium, copper and steel products, along with materials for optical disks.

The falsifications stretch back for more than 10 years, and the company last week said it had lost some customers to competitors because of the widespread tampering.

Kobe Steel may drop its earnings forecast when it announces its first-half results next week, a senior executive told reporters late on Monday.

The company is forecasting net profit of 35 billion yen for the year through March, 2018, after two consecutive annual losses. It is due to announce earnings for the April-September half on Oct 30.

The company is considering dropping the forecast or revising it to take into account the known impact of the scandal, the executive said.

Kobe Steel shares, which have fallen nearly 40 percent since the scandal broke, closed up 0.9 percent on Tuesday. The main Nikkei index was up 0.5 percent.

(Additional reporting by Ritsuko Shimizu, Kentaro Hamada and Ami Miyazaki; Writing by Aaron Sheldrick; Editing by Stephen Coates and Raju Gopalakrishnan)