Ja­pan’s Kobe Steel CEO warns of deep­en­ing qual­ity scan­dal

The head of Ja­pan’s Kobe Steel warned that a qual­ity con­trol scan­dal en­gulf­ing his firm was likely to widen at home and abroad as he ac­knowl­edged that trust in the steel­maker has ‘fallen to zero’

Daily Sabah (Turkey) - - Business -

STEEL maker Kobe Steel apol­o­gized yes­ter­day after find­ing wider prob­lems, dat­ing back to 2011, with faked in­spec­tions data for me­tals used in many prod­ucts, in­clud­ing cars, bul­let trains, aircraft and ap­pli­ances. Kobe Steel’s pres­i­dent, Hiroya Kawasaki, bowed deeply in a for­mal apol­ogy, lament­ing that “Trust in our com­pany has dropped to zero.”

He promised a se­nior trade min­istry of­fi­cial that the com­pany, Ja­pan’s third-largest steel­maker, would pro­vide re­sults of safety in­spec­tions within two weeks and a re­port on the cause of the prob­lem within a month. Ak­i­hiro Tada, di­rec­tor of the min­istry’s Man­u­fac­tur­ing In­dus­tries Bureau, urged the com­pany to move quickly in re­solv­ing the prob­lems, which are thought to have af­fected many of the coun­try’s largest manufacturers.

The com­pany, Ja­pan’s third-largest steel maker, said in a state­ment late 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. The gov­ern­ment has urged Kobe Steel to clar­ify the ex­tent of the mis­con­duct. The lat­est dis­cov­ery was of fal­si­fi­ca­tion of data on 140 tons of steel pow­der supplied to one cus­tomer in fis­cal 2016, be­tween April 2016 and March 2017. An­other case in­volved 6,611 items of sput­ter­ing tar­get ma­te­ri­als shipped to 70 cus­tomers be­gin­ning in Novem­ber 2011. Kobe Steel said it had failed to carry out tests it had agreed to con­duct, and im­prop­erly “rewrote” in­spec­tion data. But it said most of those ma­te­ri­als, used to de­posit thin films from var­i­ous ma­te­ri­als onto com­po­nents such as com­puter chips, were re-in­spected and are thought to have met cus­tomers’ spec­i­fi­ca­tions.

Ear­lier the com­pany said that in the year up to Aug. 31 it had sold ma­te­ri­als such as alu­minum flat-rolled prod­ucts, alu­minum ex­tru­sions, cop­per strips, cop­per tubes and alu­minum cast­ings and forg­ings us­ing fal­si­fied data on such things as the prod­ucts’ strength.

The gov­ern­ment has asked the com­pany to pro­vide more information about the prod­ucts supplied to more than 200 Kobe Steel cus­tomers, re­port­edly in­clud­ing some of the coun­try’s big­gest manufacturers, in­clud­ing de­fense con­trac­tor Mit­subishi Heavy In­dus­tries and a num­ber of au­tomak­ers. It was un­clear if the to­tal of 40,900 tons of prod­ucts in­volved in­cluded ship­ments to other coun­tries.

“We have con­firmed that alu­minum from Kobe Steel is used in the hoods and doors of some of our ve­hi­cles,” Nis­san said in an email. “As hoods are re­lated to pedes­trian safety, we are work­ing to quickly as­sess any po­ten­tial im­pact on ve­hi­cle func­tion­al­ity.” Toy­ota also con­firmed that the ma­te­rial has been used in hoods and rear doors of some of its ve­hi­cles.

“Putting the ut­most pri­or­ity on the safety of our cus­tomers, we are rapidly work­ing to iden­tify which ve­hi­cle mod­els might be sub­ject to this sit­u­a­tion and what com­po­nents were used, as well as what ef­fect there might be on in­di­vid­ual ve­hi­cles,” Toy­ota said in a state­ment. “At the same time, we are con­sid­er­ing what mea­sures need to be put in place go­ing for­ward.”

Aircraft maker Boe­ing said it, too, is look­ing into the prob­lem but had no rea­son to be­lieve it was a safety con­cern. Prod­uct qual­ity scan­dals have posed a chal­lenge to the image of top Ja­pan’s manufacturers in re­cent years. In one of the largest, auto parts maker Takata Corp. has paid $1 bil­lion in penal­ties for con­ceal­ing an air bag de­fect blamed for at least 19 deaths world­wide. Ma­jor au­tomak­ers are also en­gaged in mas­sive re­calls and fac­ing crit­i­cism for al­legedly con­tin­u­ing to use the de­fec­tive air bags de­spite know­ing of the prob­lem.

Kobe Steel Pres­i­dent and CEO Hiroya Kawasaki speaks to the me­dia after a meet­ing with Min­istry of Econ­omy, Trade and In­dus­try’s Di­rec­tor-Gen­eral of Man­u­fac­tur­ing In­dus­tries Bureau Ak­i­hiro Tada at the min­istry in Tokyo.

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