Published: Thu, October 12, 2017
Finance | By Loren Pratt

Japan trade ministry says Kobe Steel scandal harms trust in country's manufacturing

Japan trade ministry says Kobe Steel scandal harms trust in country's manufacturing

In the U.S., General Motors said it is checking whether its cars contain falsely certified parts or components sourced from Kobe Steel, the latest major automaker to be dragged into the widening scandal.

Kobe Steel president Hiroya Kawasaki said today there may be other cases in which data has been fabricated by Japan's third-biggest steelmaker, which is reeling from a cheating scandal that has reverberated along global supply chains.

Earlier the company said that in the year up to August 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 Ministry of Economy, Trade and Industry ordered Kobe Steel to report on the results of safety checks within about two weeks and the reasons for the tampering, along with prevention measures in under a month. He criticised the apparently widespread falsification of data as "inappropriate". The government has urged Kobe Steel to clarify the extent of the misconduct.

MHI said Kobe Steel products were used on its Mitsubishi Regional Jet and rockets, including a H-2A rocket launched on Tuesday to put a navigation satellite into orbit.

If you purchased or otherwise acquired Kobe Steel ADRs and suffered a loss, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Brandon Walker or Melissa Fortunato by email at investigations@bespc.com, or telephone at (212) 355-4648, or by filling out this contact form.


Japan's famous "Shinkansen" bullet trains also used Kobe Steel's aluminium, as did high-speed trains in Britain, according to engineering firm Hitachi.

Honda spokesman Tamon Kusakabe told AFP: "As to safety, we are still studying (a possible) impact".

Toyota also confirmed that the material has been used in hoods and rear doors of some of its vehicles.

He would not identify the companies by name but several automakers on Wednesday said they have been made aware of the problem and are investigating. It was not clear whether the scandal affected the safety of their products.

Boeing said in a statement it was working "with our suppliers since being notified of the issue".

Analysts say the announcement further tarnishes the reputation of Japan's globe-trotting manufacturers, long celebrated for their high-quality products. 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.

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