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

"It seems in some cases quality control was undertaken by veteran employees who had lots of experience, highly trusted within the organisation, and somehow these discrepancies slipped by them", company spokesperson Gary Tsuchida said.

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. "As hoods are related to pedestrian safety, we are working to quickly assess any potential impact on vehicle functionality".

However, it declined comment on a media report that materials used in semiconductors were also impacted by the scandal.

It was unclear if the total of 40,900 tons of products involved included shipments to other countries.

"Nothing in our review to date leads us to conclude that this issue presents a safety concern, and we will continue to work diligently with our suppliers to complete our investigation".

In Japan and overseas, manufacturers that have used Kobe Steel materials have been racing to check that the safety of their own products has not been compromised.

Kobe Steel said it discovered the violations during internal inspections and "emergency quality audits". At this point, we don't see a critical problem as we have our own safety inspection on materials we use.

Kobe Steel's president, Hiroya Kawasaki, issued a formal apology, lamenting that "trust in our company has dropped to zero".

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Deputy Chief Cabinet Secretary Kotaro Nogami told reporters that the government was seeking more information about the problem and trying to determine its possible impact on product safety.

Akihiro Tada, director of the ministry's Manufacturing Industries Bureau, urged the company to move quickly in resolving the problems, which are thought to have affected numerous country's largest manufacturers.

The Japanese government urged steelmaker Kobe Steel on Wednesday to clarify the extent of manipulation of inspection data on steel, aluminium and other metals used in a wide range of products, reportedly including rockets, aircraft and cars, in the latest quality scandal to rock Japanese manufacturing.

The admission from the steel and aluminum maker follows scandals involving falsified data at household names such as Nissan Motor, Mitsubishi Motors and Takata Corp., which filed for bankruptcy earlier this year.

Kobe Steel shares closed at the limit low after being untraded for the whole session, diving 22 percent to 1068 yen.

In June of last year, it said an affiliate, Shinko Wire Stainless Co, falsified data on tests for tensile strength of some stainless steel wire for springs over a period of more than nine years.

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.

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