Bullet train in Kobe Steel crisis

Kobe Steel parts used in Japan’s iconic bullet trains failed industry standards, officials said yesterday, bringing to light fresh evidence of wrongdoing by the steelmaker as investors speculated that the crisis could trigger a breakup of the 100-year-old company.

Central Japan Railway Co, which operates the high- speed trains between Tokyo and Osaka, said two types of aluminum parts used to connect cars to wheels fell short in quality tests, though they don’t pose any safety concerns.

West Japan Railway Co, which runs services from Osaka to Fukuoka, also found sub- standard parts made by Kobe Steel, company spokesman Yudai Ochi said.

The latest scandal to hit Japan’s manufacturing industry erupted on Sunday after the country’s thirdlargest steel producer admitted it faked data about the strength and durability of some aluminum and copper. As scores of its clients from Toyota to General Motors scrambled to determine if they used the suspect materials and whether safety was compromised, the company said two more products were affected and further cases could come to light. The company’s shares steadied after a twoday rout.

Figures were systematically fabricated at all four of Kobe Steel’s local aluminum plants, with the practice dating back as long as 10 years for some products, executive vice president Naoto Umehara said on Sunday.

The company said Wednesday that data was also faked for iron ore powder and target materials that are used in DVDs and LCD screens.

In Central Japan Railway’s bullet trains, 310 of the tested parts were found to be substandard and will be replaced at t he next regular inspection, spokesman Haruhiko Tomikubo said. They were produced by Kobe Steel over the past five years, he said.

About US$1.6 billion of the company’s market value has been wiped out since the revelations were made.

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Kiyotaka Matsuda Masumi Suga READ MORE on page 17: ‘Scandals tarnishing Japan Inc’