TOKYO: Kobe Steel Ltd triggered an industrial scandal that reverberated across Asia’s second-largest economy on Tuesday after saying it falsified data related to strength and durability of some aluminum and copper products to make them look as if they met client quality standards.
The company’s stock was untraded at the open in Tokyo, poised to slump by the daily limit, as offers to sell the shares outweighed bids by about 60 to 1, with the company’s clients including Toyota Motor Corp and Mitsubishi Heavy Industries Ltd assessing the fallout. Subaru Corp said parts it made for cars and planes used aluminum from Kobe Steel that was subject to falsification.
Kobe Steel’s admission raises fresh concerns about the integrity of Japanese manufacturers, and follows Takata Corp misleading automakers about the safety of its exploding air bags, and last week’s recall by Nissan Motor Co of cars in Japan after regulators discovered unauthorised inspectors approved vehicle quality. Kobe Steel said on Sunday that the products were delivered to more than 200 companies but didn’t disclose customer names.
Toyota said it has found Kobe Steel materials, for which the supplier revealed to have falsified data, used in hoods, doors and peripheral areas. “We are rapidly working to identify which vehicle models might be subject to this situation and what components were used,” Toyota spokesman Takashi Ogawa said. “We recognise that this breech of compliance principles on the part of a supplier is a grave issue.”
Kobe Inspections
Kobe Steel said it discovered the falsification in inspections on products shipped from September 2016 to August 2017, adding there haven’t been any reports of safety issues. The products account for 4% of shipments of aluminum parts, copper parts and aluminum castings and forgings.
Among comments by Kobe Steel customers:
Honda Motor Co.: “We have contacted the relevant departments, and are currently in the processing of checking.”Mazda Motor Corp.: “We use aluminum produced by Kobe Steel, but we are currently in the process of checking which vehicles it’s used in, and how it’s used in those vehicles. We are also currently checking if the aluminum we used was subject to data falsification.”
Subaru: “We have confirmed that cars and planes including their parts made by Subaru used aluminum made by Kobe Steel that was subject to data falsification. We are in the process of checking which kinds of cars, planes and parts are affected.”
Suzuki Motor Corp.: “We are checking whether we used aluminum from Kobe Steel, and if so, if it is subject to data falsification.”
This latest scandal threatens to further undermine confidence in the quality of Japanese manufacturing. Shinko Wire Co, a Kobe Steel affiliate, in June 2016 said a unit had misstated data on tensile strength of stainless steel wires for springs and that it had supplied customers with alloy that failed to meet Japanese industrial standards.
In other recent Japanese product-related cases, Takata pleaded guilty in the US in February to one count of wire fraud for misleading automakers about the safety of its exploding air bags.
Toyo Tire & Rubber Co officials were referred to prosecutors in March following the company’s 2015 admission that it had falsified data on rubber for earthquake-proofing buildings. Nissan last week recalled more than 1 million cars in Japan. - Bloomberg
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