Consumer Fraud

Kobe Steel Metals Scandal Impacts Global Manufacturers

Steel Pixabay 315x210 Kobe Steel Metals Scandal Impacts Global ManufacturersKobe Steel, one of Japan’s largest metal manufacturers, admitted this week that it had falsified quality and durability data for at least 20,000 tons of steel it sold to manufacturers, which used the potentially inferior metals in cars, airplanes, rockets, high-speed trains, defense equipment and other products.

“The credibility of Kobe Steel has plunged to zero,” Kobe’s chief executive, Hiroya Kawasaki, said after the company admitted first to falsifying data about the strength and durability of its aluminum and copper products and then to falsifying data about its iron ore powder.

The apparent fraud came to light after the Central Japan Railway Company tested parts of its high-speed bullet trains and discovered that more than 300 components made of Kobe Steel materials did not meet the required and agreed-upon standards.

The full scope of Kobe Steel’s deception is not yet clear, but it is known that the company supplied falsely certified metals to Boeing, Toyota, Nissan, Honda, Mazda, Subaru, Mitsubishi Heavy Industries, Kawasaki Heavy Industries and about 200 other manufacturers.

Many of the companies affected by the false safety certifications said they are analyzing components and running safety checks.

“We recognize that this breach of compliance principles on the part of a supplier is a grave issue,” said Toyota, which said potentially deficient Kobe metals were used to make the hoods and rear doors of vehicles manufactured in Japan, according to the Financial Times. Honda and Nissan have also said they used the affected metals to make auto hoods and doors.

Boeing commented on the matter, saying it was running comprehensive inspections and analyses of Kobe Steel materials since it was informed of the company’s data falsification.

“Nothing in our review to date leads us to conclude that this issue presents a safety concern, and we will continue to work diligently with our suppliers to complete our investigation,” it said.

Yasuji Komiyama, director of metal industries at Japan’s Ministry of Economy, Trade and Industry, said the Kobe Steel scandal was “threatening fair and proper trading” by other companies. The Japanese government became aware of the scandal last month.

According to The Guardian, other possible data manipulations at Kobe Steel may stretch back a decade.

The Kobe Steel scandal is the latest major manufacturing scandal to tarnish the “made in Japan” image, coming amid the Takata airbag scandal that led to the biggest automotive recall in history, and in the wake of several other scandals, including Toyota’s sudden unexpected acceleration crisis and Mitsubishi’s fuel economy falsification scandal.