Published: Thu, October 12, 2017
Business | By Max Garcia

Carmakers hit in Japan steel scandal

Carmakers hit in Japan steel scandal

The company said in a statement late on Wednesday that it had uncovered manipulation of data on steel powder used in metallurgy and also on high-tech materials used to create films used in computer chips. "It seems in some cases quality control was undertaken by veteran employees who had lots of experience, highly trusted within the organisation, and somehow these discrepancies slipped by them", company spokesperson Gary Tsuchida said.

Kawasaki told reporters the trade ministry had ordered Kobe Steel to report on the result of safety checks within two weeks, and on the reasons for data fabrication and prevention measures in under a month.

Kobe Steel, Japan's third-largest steel maker, has announced that between September 1, 2016 and August 31 of this year, it sold aluminium and copper materials using falsified data on such things as the products' strength.

In Japan and overseas, manufacturers that have used Kobe Steel materials have been racing to check that the safety of their own products has not been compromised.

Industry ministry officials said Kobe Steel materials were used in some defense equipment made by Kawasaki Heavy, MHI, IHI Corp and Subaru and checks were being made for any safety issues. Central Japan Railway said while some Kobe Steel parts for its bullet trains did not meet Japanese industrial standards, there were no safety issues. He criticised the apparently widespread falsification of data as "inappropriate".

Toshiba is still working to recover from an accounting scandal that began in 2015.

"The scandal looks similar to that of Toyo Tire, and not as massive (or) devastating as Takata's".

The Japanese government has asked the company to provide more information about the products supplied to more than 200 customers, reportedly including some of the country's biggest manufacturers, including defence contractor Mitsubishi Heavy Industries and a number of automakers. Toyota said it uses materials from Kobe in bonnets, rear doors and other vehicle parts. The government has urged Kobe Steel to clarify the extent of the misconduct.

It's not the first time Kobe Steel has been caught up in falsifying data.

"We want Kobe Steel to make the utmost effort to restore trust from society", he said. The company said it was assessing its options.

Sales at Kobe Steel's aluminum and copper division fell 6.4 percent to 323.3 billion yen ($2.9 billion) in the year to March, and recurring profit dropped by more than a fifth to 12 billion yen.

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