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Toyota, Boeing and others checking if they used compromised raw materials from Kobe Steel

.. Kobe Steel Says It Falsified Data on Some Aluminum


… Kobe Steel’s Falsified Data Is Another Blow to Japan’s Reputation

…Employees altered inspection certificates to meet specifications, setting off a rush by Toyota, Boeing and others to see if they had used the raw materials.


TOKYO — For decades, Japanese manufacturers of cars, aircraft and bullet trains have relied on Kobe Steel to provide raw materials for their products, making the steel maker a crucial, if largely invisible, pillar of the economy.

Now, Kobe Steel has acknowledged falsifying data about the quality of aluminum and copper it sold, setting off a scandal that is reverberating through Japan and beyond, and casting a new shadow over the country’s reputation for precision manufacturing, a mainstay of its economy.

Companies ranging from the automakers Toyota Motor and Honda Motor to aircraft companies like Boeing and Mitsubishi Heavy Industry said they were investigating the use of rolled aluminum and other materials from Kobe in their products. They also said they were trying to determine if substandard materials had been used in their products, and if so, whether they presented safety hazards.

Kobe Steel said on Sunday that employees at four of its factories had altered inspection certificates on aluminum and copper products from September 2016 to August this year. The changes, it said, made it look as if the products met manufacturing specifications required by customers — including for vital qualities like tensile strength — when they did not.

Kobe Steel added that it was examining other possible episodes of data falsification going back 10 years. It did not provide details about the size of the discrepancies it had discovered, making it difficult to immediately determine if they posed a safety threat.

The company’s share price plunged more than 20 percent on Tuesday, the first day of trading after a holiday.

No deaths or safety incidents have been attributed to Kobe Steel, but the scandal hits a tender spot for Japan, which relies on its reputation for quality manufacturing while places like China offer cheaper alternatives.

“The falsification problem has become an issue that could destroy international faith in Japanese manufacturing,” the Japanese financial newspaper Nikkei said in an article on Tuesday.

Last week, Nissan Motor said unqualified staff members had carried out inspections at its factories, prompting it to recall 1.2 million vehicles, though it was not clear if the quality of the vehicles had been affected. Mitsubishi Motors and Suzuki Motor both admitted last year that they had been exaggerating the fuel economy of their vehicles by cheating on tests.

Perhaps the biggest blow to Japan’s reputation for quality has come from Takata, the automotive airbag maker that declared bankruptcy in June after causing the largest auto safety recall in history, involving tens of millions of vehicles. Its faulty airbags have been blamed for more than a dozen deaths.

Toshiaki Oguchi, director of Governance for Owners Japan, a corporate watchdog, said that Japanese companies were generally diligent about quality, but that when cheating occurs — because of competitive pressure or other factors — it can too easily go unchecked. That, he said, is because companies discourage thorough examination or criticism, either from employees or independent outsiders.

“When something goes wrong, companies always hire a committee of outsiders to examine what happened,” he said. “But why not be proactive? Why not have people reviewing procedures all the time?”


A Nissan Motor Corporation assembly line in Yokohama, Japan, in August. Nissan and other Japanese automakers said they would investigate whether they would be impacted by Kobe Steel’s disclosure that some employees had falsified inspection certificates. CreditShizuo Kambayashi/Associated Press

Even as Japan has given up its technological lead in technologies like televisions, cellphones and computers, it still excels in highly valued products used behind the scenes, including precision machinery, specialty chemicals, sensors and cameras.

Quality helps Japan preserve its markets overseas despite intense competition. For example, although China is the world’s largest steelmaker, iron and steel remain one of Japan’s biggest exports there, where it is used in industries like auto manufacturing.

Kobe Steel said it had confirmed data falsification affecting roughly 19,300 tons of flat-rolled and extruded aluminum products, 19,400 units of aluminum casting and forgings, and 2,200 tons of copper products. The amount represents about 4 percent of the company’s output of those products from September 2016 to August 2017.

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