Kobe Steel fined for fabricating data amid falling credibility of made-in-Japan products

Source: Xinhua| 2019-03-13 21:25:15|Editor: zh
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TOKYO, March 13 (Xinhua) -- The Tachikawa Summary Court in Tokyo on Wednesday ordered Kobe Steel Ltd. to pay a 100 million yen (898,000 U.S. dollars) fine for its culpability in falsifying product quality data at three of the steelmaker's plants in Japan.

The court found Kobe Steel had violated an antitrust law by manipulating product quality data at its plants which sent 300 fabricated product certificates to its clients through September 2017.

The falsified certificates were sent, it was found, despite the products not being up to the clients' specifications.

"We are fully committed to implementing measures to prevent a similar incident from happening again and will introduce drastic reforms to win back trust," Kobe Steel said in a statement after the ruling was made.

The result of an internal probe last year found that aluminum and copper products had been shipped to more than 600 firms both in Japan and overseas and used in the building of consumer-facing transportation hardware such as commercial airplanes and bullet trains.

At the conclusion of the probe, Kobe Steel said in order to make it look like their products met their clients' specifications, they deliberately falsified the strength, durability and other data pertaining to the more than 600 products shipped to their clients.

Data, it was found, was manipulated at 23 domestic and overseas plants, with the company also admitting that more than 40 employees were involved in the falsification practice, which the firm said had been endemic in the company since the 1970s when the misconduct first began at its Tochigi Plant.

Companies ranging from automakers and airplane manufacturers, to defense equipment and Shinkansen bullet train makers, have been affected by the protracted scandal that has rocked the manufacturing world both domestically and globally.

In Japan, major railway operators Central Japan Railway and West Japan Railway have stated that their Shinkansen bullet trains contained aluminum parts sourced from Kobe Steel that did not meet industry standards.

The railway operators have since taken their own measures to rectify the potentially faulty components.

Beyond automakers and trains, Kobe Steel has also been implicated in fabricating data for aerospace and defense-related products.

Along with domestic firms such as Toyota Motor Corp., Nissan Motor Co., Honda Motor Co. and major Japanese railway operators, the scandal has also affected overseas companies including General Motors Co., Ford Motor Co., Airbus and Boeing Co.

Kobe Steel was founded in 1905 and has been a bastion of Japan's manufacturing sector.

The magnitude of Kobe Steel's data fabrication scandal has cast doubts over corporate governance in the manufacturing industry and beyond in Japan, and has cast serious aspersions over Japan's once stellar reputation for precision manufacturing, industry, experts here have said.

Along with Kobe Steel, other major Japanese manufacturers have also been found conducting similar improper practices, with Mitsubishi Materials Corp.'s subsidiaries found to have falsified quality data for products used in multiple industries, including in equipment used by Japan's Self-Defense Forces (SDF).

Uncertified safety checks were also found to have been routinely carried out by automakers Nissan Motor Co. and Subaru Corp., which led to extensive recalls and contributed to diminishing trust in Japan's manufacturing industry.

During the latest trial pertaining to Kobe Steel's improprieties, prosecutors maintained that the steelmaker had "damaged the credibility of made-in-Japan products" by allowing the inherent fraudulent practice to continue for more than four decades.