Kobe Steel admits it sold substandard metals to hundreds of clients. After Takatas lethal airbags and testing scandals at various carmakers, this is yet another blemish on Japan’s reputation for product quality. Something is going badly wrong with corporate cultures.
Kobe Steel said on October 8 that it had supplied aluminium and copper products mislabelled as meeting specifications agreed with customers. The misconduct involved products shipped to about 200 customers, and possibly stretched back a decade, Reuters reported on October 10, citing the company.
Toyota Motor, Central Japan Railway, Mitsubishi Heavy Industries, Mazda Motor and Subaru were among affected customers, Reuters added, citing media reports and statements. Kobe Steel said it not had recognized specific problems casting doubts on the safety of the nonconforming products and that the episode had brought overwhelming shame.
The company said that its Chairman, President and Chief Executive Hiroya Kawasaki would chair an investigation committee, and that a law firm would be hired to probe conduct. Shares in Kobe Steel were untraded as of mid-afternoon in Tokyo on Oct. 10, with a glut of sell orders. Japanese markets were closed for a public holiday the previous day.
(The author, Quentin Webb, is a Reuters Breakingviews columnist. The opinions expressed are his own.)
