Japan’s Kobe Steel CEO warns of deepening quality scandal

AFP, TOKYO: The head of Japan’s Kobe Steel warned yesterday that a quality control scandal engulfing his firm was likely to widen at home and abroad, as he acknowledged that trust in the steelmaker has “fallen to zero”.

The comments came as a growing list of customers, including major automakers Toyota, Nissan and Honda, scramble to assess the safety of vehicles containing products supplied by the company, which has admitted falsifying quality data for products sold to some 200 clients.

The head of Japan’s number three steelmaker said yesterday that his firm was checking with more Japanese clients as well as foreign buyers including General Motors.

“We deeply apologise,” Hiroya Kawasaki told a press briefing as he bowed deeply - a common act of contrition for Japanese executives.

“Trust in Kobe Steel has fallen to zero.”

There were more “suspicious cases” that could hike the number of affected products, he added.

“There’s a possibility that there will be new cases of wrongdoing,” Kawasaki said.

Kobe Steel’s stock plunged by about 40 per cent this week after the manufacturer on Sunday first admitted falsifying data linked to the strength and quality of products, a practice that may have started a decade ago.

It is the latest in a string of quality control and governance scandals to hit major Japanese businesses in recent years, undermining the country’s reputation for quality.

The affected products include aluminium found in Japan’s iconic bullet trains as well as materials in high-speed trains in Britain, although it is not clear whether the scandal affected product safety.

Japan’s industry ministry has pressed Kobe Steel to work with its clients, spread over a wide range of industries, to conduct urgent safety analysis.

On Wednesday, the firm admitted that it was in talks with one client who received steel powder that did not match specifications.

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

Toyota has already said Kobe Steel supplied materials to one of its Japanese factories, which used them in hoods, rear doors and surrounding areas of certain vehicles.

Japans Kobe Steel CEO warns of deepening quality scandal

AFP, TOKYO: The head of Japans Kobe Steel warned yesterday that a quality control scandal engulfing his firm was likely to widen at home and abroad, as he acknowledged that trust in the steelmaker has fallen to zero. The comments came as a growing list of customers, including major automakers Toyota, Nissan and Honda, scramble to assess the safety of vehicles containing products supplied by the company, which has admitted falsifying quality data for products sold to some 200 clients. The head of Japans number three steelmaker said yesterday that his firm was checking with more Japanese clients as well as foreign buyers including General Motors. We deeply apologise, Hiroya Kawasaki told a press briefing as he bowed deeply - a common act of contrition for Japanese executives. Trust in Kobe Steel has fallen to zero. There were more suspicious cases that could hike the number of affected products, he added. Theres a possibility that there will be new cases of wrongdoing, Kawasaki said. Kobe Steels stock plunged by about 40 per cent this week after the manufacturer on Sunday first admitted falsifying data linked to the strength and quality of products, a practice that may have started a decade ago. It is the latest in a string of quality control and governance scandals to hit major Japanese businesses in recent years, undermining the countrys reputation for quality. The affected products include aluminium found in Japans iconic bullet trains as well as materials in high-speed trains in Britain, although it is not clear whether the scandal affected product safety. Japans industry ministry has pressed Kobe Steel to work with its clients, spread over a wide range of industries, to conduct urgent safety analysis. On Wednesday, the firm admitted that it was in talks with one client who received steel powder that did not match specifications. However, it declined to comment on a media report that materials used in semiconductors were also impacted by the scandal. Toyota has already said Kobe Steel supplied materials to one of its Japanese factories, which used them in hoods, rear doors and surrounding areas of certain vehicles.