Supplier Shipped Substandard Metals Across Japanese Automotive Industry For Almost A Decade

Gladys Abbott
October 11, 2017

A Subaru company representative said, "We will put the safety of customers using our products first".

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

The automaker is grappling with its own compliance failures, recalling all new cars sold in Japan in the last 3 years after discovering final vehicle inspections were not performed by authorized technicians. The affected products are supplied to some 200 companies including Subaru, Toyota, Honda and Boeing. CEO Hiroya Kawasaki is now leading a committee to probe quality issues. The false data has been linked back to four aluminium factories in Japan, and for some items, the practice goes back almost 10 years, the executive vice president, Naoto Umehara confirmed.

Doors and hoods are also affected at Nissan, a spokesman confirmed.

Kobe Steel, one of Japan's oldest industrial companies, was founded more than a century ago.

What products have this aluminum or copper? Its units include Kobelco Construction Machinery Co., which produces diggers.

Honda said doors and hoods are affected, while Subaru said vehicles and aircraft are affected. The products account for 4% of shipments of aluminium and copper parts as well as castings and forgings.

"The impact on financials is unclear, but could be substantial depending on request (s) for replacement/recall", Jefferies analyst Thanh Ha Pham said in a note. The trains haven't started operation yet. There are so far no reported safety issues, it said.

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In an internal audit, it was found that the company had corroborated data on the characteristics of multiple aluminum and copper parts and components.

Suzuki Motor and Mitsubishi Motors said they were checking whether their vehicles were affected.

"We perceive that there was no problem as the rocket launch was a success", he said. "Checks are under way, but at this point no large effects have been found in the manufacture of the rocket or MRJ".

"It's so regrettable that such things happened to companies that represent (the image of) Japan", he said, adding that manufacturers in question should find out the cause of such misconducts and make sure they never happen again.

"We want Kobe Steel to make the utmost effort to restore trust from society", he said.

The Ministry of Economy, Trade and Industry said on Tuesday it was tracking the case.

"This is a serious matter that shakes the foundation of fair commercial transactions", said Yasuji Komiyama, director of the metal industries division of Japan's Industry Ministry.

In other recent Japanese product-related cases, Takata pleaded guilty in the USA in February to one count of wire fraud for misleading vehicle makers about the safety of its exploding air bags.

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