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The crisis of Kobe Steel Ltd, Japan's third largest steel maker plus producer-supplier of engine valve springs and other parts to world’s top airline and automobile manufacturers, deepened further as the company lost some customers to its competitors because of wide-spread data falsification that had extended to its mainstream steel sheet business. Though they did not quantify the impact publically at the moment, the reports said that Kobe Steel violated statutory standards set by the steel industry ministry, not just specifications agreed with customers.  

​​Until now the 112 year old company had said products it sold with falsified data met safety and other standards but didn't meet contact specifications agreed with customers. It had also said the problem was mainly with aluminium and copper products. 

Kobe Steel initially said that it found widespread falsification of data on strength and durability of copper and aluminium products sent to customers. Kobe Steel has stopped shipping about 43 percent of copper products from the plant over the problems with the statutory standards, a company spokeswoman said. Interestingly, the falsifications stretch back for more than 10 years.  

Global automakers, aircraft companies and other manufacturers have scrambled to identify potential hazards in their products because of the falsification, although four Japanese carmakers said they have found no safety issues with aluminium parts supplied by Kobe Steel. But in Europe, aviation safety authorities have already week issued a directive advising aircraft manufacturers to avoid using Kobe Steel products if they can until checks are completed. 

Kobe Steel Ltd, Japan's third largest steel company in deep trouble

26-Oct-2017

Kobe Steel executive vice president Naoto Umehara told in a news conference that Kobe Steel had found a breach of industrial standards at its Hatano copper plant South-West of Tokyo, along with a new case of falsification of data at a unit that cuts and processes steel plate. 

Government ministers waded into the fray, saying the government would take an active role in getting to the bottom of a scandal. The company is now subject to a US justice department probe while checks continue at hundreds of its clients involved in complex supply chains spanning the globe. They could suspend or cancel the “ISO9001” certification of the plant if it doesn’t meet the standard, which could affect its business as many global buyers require suppliers to use the benchmark. The Ministry of Trade and Industry believes “the data concealment by its employees has hurt the credibility of Kobe Steel’s voluntary investigation,” said Yasuji Komiyama, director of the industry ministry’s metal industries division.

(Source: Reuters) 


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