Global worry after false data from steel giant
Kobe Steel finds inspectors falsified data on aluminum, copper
TOKYO — Big manufacturers of cars, aircraft and bullet trains have long relied on Kobe Steel to provide raw materials for their products, making the steelmaker a crucial, if largely invisible, pillar of the Japanese economy.
Now, Kobe Steel has acknowledged falsifying data about the quality of aluminum and copper it sold, setting off a scandal that is reverberating through the global supply chain and casting a new shadow over the country’s reputation for precision manufacturing.
The fallout has the potential to spread to hundreds of companies. Big multinationals, including automakers like Toyota, General Motors and Ford, as well as aircraft manufacturers like Boeing and Mitsubishi Heavy Industries, are investigating.
The companies are trying to determine if substandard materials were used in their products and, if so, whether they present safety hazards. It is a daunting task, since multinationals source from various suppliers and producers.
On Wednesday, the Japanese government urged Kobe Steel to clarify the extent of the manipulation of inspection data.
Deputy Chief Cabinet Secretary Kotaro Nogami told reporters the government was seeking more information about the problem and trying to determine its possible impact on product safety. He criticized the apparently widespread falsification of data as “inappropriate.”
The scandal hits a tender spot for Japan. The country relies on its reputation for quality manufacturing as a selling point over China and other countries that offer cheaper alternatives. But its reputation has been marred by a series of problems at some of Japan’s biggest manufacturers.
Last week, Nissan Motor said unqualified staff members had carried out inspections at its factories, prompting the carmaker to recall 1.2 million vehicles, though it was not clear if the quality of the vehicles had been affected. Mitsubishi Motors and Suzuki Motor both admitted last year that they had been exaggerating the fuel economy of their vehicles by cheating on tests.
Perhaps the biggest blow to Japan’s reputation for quality has come from Takata, the airbag maker that was at the centre of the largest auto safety recall in history, involving tens of millions of vehicles. Its faulty airbags have been blamed for more than a dozen deaths. Takata declared bankruptcy in June.
Kobe Steel said on Sunday that employees at four of its factories had altered inspection certificates on aluminum and copper products from September 2016 to August this year. The changes, it said, made it look as if the products met manufacturing specifications required by customers — including for vital qualities like tensile strength, a measure of stiffness — when they did not.
Kobe Steel added that it was examining other possible episodes of data falsification going back 10 years. The company did not provide significant details on the discrepancies, making it difficult to immediately determine if they posed a safety threat. No deaths or safety incidents have been attributed to Kobe Steel.
Global manufacturers are now trying to assess their exposure, as they dig through an extensive supply chain.
A big car company like GM buys millions of tons of steel a year from a dozen or two dozen producers, in a variety of grades and forms. Steel can be sourced from different mills and shipped to any number of plants worldwide. GM, for example, has 12 vehicle assembly plants and six stamping plants in the United States alone, all of which take deliveries of steel from many different producers.
All of Japan’s major carmakers — Honda, Mazda, Mitsubishi, Nissan, Subaru, Suzuki and Toyota — are looking into their use of Kobe Steel materials. Toyota called the data falsification a “grave issue” and said it was looking into the problem and considering how best to respond, a statement echoed by other carmakers. Both Ford and General Motors are trying to determine whether they have used the company’s products.
Mitsubishi Heavy Industries uses aluminum from Kobe Steel in a mid-size aircraft it is developing, the Mitsubishi Regional Jet, as well as aircraft components it supplies to Boeing. Mitsubishi Heavy said it was investigating. Boeing said in a statement, “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.”
Kobe Steel said it had confirmed data falsification affecting roughly 19,300 tons of flat-rolled and extruded aluminum products, 19,400 units of aluminum casting and forgings, and 2,200 tons of copper products.