Japan's Kobe Steel scandal forged over a decade


Kobe Steel CEO Kawasaki has run the company since 2013, and has recently overseen moves to expand its presence in aluminium.

Shares in Japanese manufacturing firm Kobe Steel plunged more than 20 per cent today after it admitted to falsifying data about its products over the weekend.

Toyota is one of 200 companies potentially impacted by Kobe Steel's fraudulent practices; however, its USA built vehicle appear to be unaffected.

Aluminum is widely used in cars, planes and high-speed trains in Japan which use the light-weight metal to increase fuel efficiency.

While the scam is reported to have involved numerous employees and gone on for as long as a decade, Kobe said its investigations so far had shown the misrepresentation specifically affected certain copper and aluminium products shipped in September and August.

The falsification was meant to make the metals look as though they met client quality standards.

The Japanese government has already instructed vehicle manufacturers to carry out safety checks on aluminum parts manufactured by Kobe Shield. Also Boeing Co., which gets some parts from Subaru, said there's nothing to date that raises any safety concerns. The company did not say which engines used the affected products. A spokesman said: "We are rapidly working to identify which vehicle models might be subject to this situation and what components were used". "We recognise that this breach of compliance principles on the part of a supplier is a grave issue".

The report says, Honda said it also used falsified material from Kobe Steel in auto doors and hoods, and Mazda Motor also confirmed it uses aluminum from the company.

Aluminium castings, forgings and flat-rolled items, along with copper strips and tubes were among the products affected, the company said in a statement.

Railway companies including East Japan Railway Co. and Central Japan Railway Co. said that the problematic products had also been used in some of the Shinkansen bullet trains. Suzuki Motor Corp. and Mitsubishi Motors Corp. all said they are checking whether their vehicles are affected. The rocket cleared all safety checks before launch, the company said. "If the aluminium business doesn't work out well, I question where the company can make money", given that profitability at the mainstay steel business remained low, he said.

A rocket it launched yesterday reportedly had materials sourced from Kobe Steel.

And this isn't the only scandal that's been coming out of Japan as of late. Toyo Tire & Rubber Co. officials were referred to prosecutors in March after the company's 2015 admission it falsified data on rubber for earthquake-proofing buildings.