Ja­panese firms’ scan­dals of­fer a vi­tal les­son

China Daily (Latin America Weekly) - - 11 Comment Editorial • Opinion -

The shock­waves from the malfea­sance in some of Ja­pan’s big com­pa­nies con­tinue to be felt as new rev­e­la­tions emerge. On Tues­day, Kobe Steel CEO Hiroya Kawasaki said he would step down, tak­ing re­spon­si­bil­ity for the qual­ity con­trol lapses that re­sulted in sub­stan­dard ma­te­ri­als be­ing sup­plied to about 605 clients, in­clud­ing 222 over­seas com­pa­nies.

Kobe Steel, which is Ja­pan’s third­largest steel­maker, sells its prod­ucts to all kinds of busi­nesses, in­clud­ing those in the avi­a­tion and au­to­mo­bile in­dus­tries, rail­ways and nu­clear power plants.

US con­sumers have filed a law­suit against Kobe Steel and Toy­ota Mo­tor Corp ac­cus­ing the two Ja­panese com­pa­nies of vi­o­lat­ing con­sumer pro­tec­tion laws and in­dulging in fraud by con­ceal­ing the use of sub­stan­dard metal com­po­nents in the lat­ter’s ve­hi­cles. The com­plaint claims that Toy­ota mod­els, such as Prius, Camry, Land Cruiser and Lexus, have all been made us­ing sub­stan­dard steel, alu­minum and cop­per.

As well as Kobe and Toy­ota, rev­e­la­tions of de­fec­tive prod­ucts, data tam­per­ing and in­ap­pro­pri­ate qual­ity con­trol pro­ce­dures have plagued other Ja­panese com­pa­nies such as Takata Corp, Mit­subishi Ma­te­ri­als Corp, To­ray In­dus­tries Inc, Nis­san Mo­tor Co and Subaru Corp.

The US Na­tional High­way Traf­fic Safety Ad­min­is­tra­tion has said that an es­ti­mated 37 mil­lion ve­hi­cles are cur­rently un­der re­calls due to de­fec­tive Takata air bags that can ex­plode when au­to­mat­i­cally in­flated, caus­ing se­ri­ous in­jury or even death to pas­sen­gers. Ex­plod­ing Takata air bags have been linked to at least 23 deaths world­wide.

The United States is sched­uled to re­call more air bags by De­cem­ber 2019, in­creas­ing the to­tal num­ber of af­fected air bags from 50 mil­lion at present to 65-70 mil­lion, the largest re­call in US his­tory.

The Ja­panese com­pa­nies con­cerned say the root cause of their wrong­do­ings is in­tense pres­sure — to cut costs, meet dead­lines and in­crease prof­its.

Ja­pan’s man­u­fac­tur­ing sec­tor faces ma­jor chal­lenges such as a la­bor short­age due to the coun­try’s rapidly ag­ing pop­u­la­tion, high la­bor costs, and the high costs of ma­te­ri­als due to a lack of nat­u­ral re­sources.

Ex­perts on in­dus­trial lo­gis­tics say that, since the man­u­fac­tur­ing sec­tor across the world has be­come more tech­no­log­i­cally ad­vanced, it is more likely that a sin­gle sup­plier, or even a sin­gle fac­tory, can be crit­i­cal to a whole in­dus­try. Ja­panese cor­po­ra­tions have mo­nop­o­lies or oli­gop­ol­ies in a host of cru­cial niches, such as the sup­ply of ad­vanced ma­te­ri­als, com­po­nents and pro­duc­tion ma­chin­ery for in­dus­tries, in­clud­ing elec­tron­ics, cars and avi­a­tion.

As the lat­est rev­e­la­tions show, the dom­i­na­tion of one sup­plier could also be risky for global sup­ply chains. The earth­quake that rocked Ja­pan’s in­dus­trial base of To­hoku on March 11, 2011, trig­gered tem­po­rary short­ages of some Ja­panese com­po­nents in many global com­pa­nies, in­clud­ing Ford Mo­tor Co and Gen­eral Mo­tors Corp.

Al­though ad­vanced economies still dom­i­nate the up­stream tasks of the global value chain and emerg­ing economies con­tinue play­ing their roles down­stream, par­tic­i­pa­tion in global sup­ply chains is be­com­ing in­creas­ingly dy­namic. Emerg­ing economies, in­clud­ing China and

Newspapers in English

Newspapers from China

© PressReader. All rights reserved.