The steel giant Kobe scandal is growing

Elias Hubbard
October 16, 2017

Kobe Steel initially said on October 8, 200 companies were affected when it admitted at the weekend it had falsified data about the quality of aluminum and copper products used in cars, aircraft, space rockets and defense equipment.

Japan's Kobe Steel has admitted that about 500 customers are affected by its worsening falsified data scandal - more than double the number first estimated - including some of the world's top car-makers.

Kobe Steel supplies half of the world's wire rod and half of Japan's aluminum auto bonnets, and also produces components for the country's iconic Shinkansen bullet trains. The company said Wednesday that data was also faked for iron ore powder and target materials that are used in DVDs and LCD screens.

The scale of the misconduct at Japan's third-largest steelmaker weakened its shares by 9 percent, wiping about $1.8 billion off its market value this week.

"So far we have not identified any suppliers that procure materials from Kobe Steel for parts fitted on our aircraft", he said by email.

The industry ministry has pressed Kobe Steel to work with its clients, spread over a wide range of industries, to conduct urgent safety analysis.

Kobe Steel's chief admitted that his firm had falsified quality data in products shipped to about 500 clients, including carmaker Toyota and aircraft manufacturers.

"Once the Japanese way of manufacturing won the praise of the world".

"The scandal looks similar to that of Toyo Tire, and not as massive (or) devastating as Takata's". Boing said that products purchased from Kobe will not pose any security issues. "Kobe Steel's technology is not something easily substitutable by others, and existing customers have nowhere else to go", said Yasuo Sakuma, Chief Investment Officer at Libra Investments in Tokyo.

In the United States, General Motors said that it did use aluminum from Kobe Steel "in certain models and we are working with Kobe to understand the potential impact".

Multinationals including Toyota Motor (7203.T), Ford Motor (F.N) and planemakers Boeing (BA.N) and Mitsubishi Heavy Industries (7011.T) have said they are investigating the safety of products from Kobe Steel.

The company said the latest problems were discovered in shipments of more than 11,000 tons of steel, copper, and aluminum products made by Kobe Steel and its affiliates in Japan, China, Malaysia and Thailand. The company said it was assessing its options.

Other reports by Click Lancashire

Discuss This Article