Kobe Steel scandal dents Japan’s image

The scandal engulfing Kobe Steel Company over quality and data fabrication keeps fermenting. Japanese officials harshly criticized Kobe Steel by name, urging it to “make the utmost effort to restore trust from society.”

The event is one of the worst corporate scandals in recent years and occurred as Japan is suffering a continuous economic downturn with its reputation for high-quality products facing fierce competition. This scandal is not an isolated one. The whole affair has dented the prestige of “Made in Japan” products.

Kobe Steel is a mature company in a fully developed economy and can be regarded as a model company of Japan. Its fabrication is different from that of a company in an emerging market. While low prices in emergent markets can be partly attributed to the kind of corner-cutting that usually makes global markets cautious, Kobe Steel’s fabrication comes as the result of its inability to maintain standards at the competitive high end of the market. It reflects a weakness in Japanese manufacturing.

The scandal reminds people that Japan, a country with limited land and resources, may have its best years behind it. Attention to detail and hard work helped Japan unleash its huge potential, but the country peaked at the end of the last century.

Japan’s research and innovation never caught up to the US and its market is the smallest among major powers. The country lacks lasting momentum and has little strategic depth and leeway. Japan relies on rigor and integrity to ram its products into the middle- and high-ranking consumption circles and its global image has been reshaped by this process.

But adulteration, fabrication and unreasoning sentiments have started to penetrate Japanese society. While the country focused on improving itself in the past, it has become increasingly eager for better treatment and keeps making fickle complaints.

Kobe Steel’s fabrication may be isolated, but in some sense, it chimes with the deception and cheating of Japanese politics. Japan is still one of the world’s most developed economies, but its miracle has long been shattered.

The key factors behind Japan’s competitiveness face constant crises and the country is no longer the unrivaled “super craftsman” to other emerging economies.

South Korea has caught up with Japan in areas where the latter once had absolute advantages and the bredth of China’s manufacturing has already surpassed that of Japan. Japan appears disorganized and stubborn in the face of the impact from the emerging market.

Japan’s Shinkansen bullet train is facing strong competition from China’s high-speed train in the overseas markets. Instead of improving technology or cutting costs, Japan turns to politics to offset its trains’ lack of competitiveness, plunging its economy into a vicious spiral.

Japan, not satisfied with mediocrity, has excelled beyond its talent and capability, but the process led to distorted values. It’s difficult for the country to accept the history and reality. Japan’s Lost 20 Years were in fact the struggling years when the country strove to maintain transitory glories.