Kobe Steel Falsified Quality Data for Metal Used in Cars

Kobe Steel parts used in Japan’s iconic bullet trains failed industry standards bringing to light fresh evidence of wrongdoing by the steelmaker as investors speculated that the crisis could trigger a breakup of the 100-year-old company

Kobe Steel parts used in Japan’s iconic bullet trains failed industry standards bringing to light fresh evidence of wrongdoing by the steelmaker as investors speculated that the crisis could trigger a breakup of the 100-year-old company

Kobe's admission of misconduct in its steel business, which accounts for about a third of revenue, ratchets up the pressure on Japan's third-biggest steelmaker.

Investigations have been completed on about 100 of the companies that Kobe supplied, Chief Executive Officer Hiroya Kawasaki said Thursday.

In a meeting with Kawasaki, Akihiro Tada, director general of the Manufacturing Industries Bureau of the Ministry of Economy, Trade and Industry, said the scandal had shaken the very core of fair trade.

Central Japan Railway, which operates high speed trains between Tokyo and Osaka, found aluminum parts used in the truck - the part that connects the wheels to train cars - failed to meet company standards, said spokesman Atsuo Utano. The government has urged Kobe Steel to clarify the extent of the misconduct.

Kobe Steel Ltd said on Friday it had falsified data on some of its steel wire products on top of the already-announced data fabrication for aluminum, iron powder products and metal materials used in optical discs.

"This incident of improper conduct came to light following self-inspections and emergency quality audits of the compliance status of contracts executed as to products shipped over the past year", Kobe Steel said in a news release. But it said most of those materials, used to deposit thin films from various materials onto components such as computer chips, were re-inspected and are thought to have met customers' specifications.

Kobe Steel Ltd (5406.T) said on Friday it has also found cases of false certification in its steel division, the latest in a string of revelations confirming widespread cheating at the firm that has engulfed its multinational clients, including Boeing Co. It was unclear if the total of 40,900 tons of products involved included shipments to other countries. "As hoods are related to pedestrian safety, we are working to quickly assess any potential impact on vehicle functionality". Toyota came out and said that some of that aluminum was used in its auto doors and other outer areas while Honda claims to have used affected aluminum in its doors and hoods.

Subaru has also confirmed that it bought affected products.

Kobe Steel was founded in 1905 and has been a pillar of Japan's manufacturing sector. Major automakers are also engaged in massive recalls and facing criticism for allegedly continuing to use the defective air bags despite knowing of the problem.