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Greenpeace: Takahama & Sendai reactors must be shut down immediately following Kobe Steel scandal

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Tokyo, 1 December 2017 – On 30 November, Kansai Electric and Kyushu Electric announced that they are delaying the restart of four nuclear reactors for approximately two months due to ongoing investigations into Kobe Steel components. Greenpeace is calling for the immediate shutdown of operating reactors, owned by these same utilities, that may also have defective Kobe Steel components at the Takahama and Sendai plants.
While Kansai Electric has delayed operation of Ohi 3 and 4 reactors, it continues to operate its two reactors at Takahama. Similarly, Kyushu Electric has delayed operation of Genkai 3 and 4, while continuing to operate its two reactors at Sendai. 
“If Kansai Electric and Kyushu Electric are delaying restart of the Ohi and Genkai reactors due to the need to conduct investigations, how can they justify continued operation of the reactors at Takahama and Sendai?  The NRA has so far failed in its responsibilities as a regulator to get to grips with this rapidly evolving scandal. It must set aside nuclear industry interests and prioritize inspections. That includes shutting down operating reactors that may have defective parts until and unless safety can be guaranteed.” said Kazue Suzuki, Energy Campaigner Greenpeace Japan.
More than a month ago, Greenpeace Japan warned that there were potentially major safety risks with Kobe Steel components installed in reactors that warranted strong intervention by the NRA.[1] On 24 October, Greenpeace Japan, along with other citizens groups, submitted evidence to the NRA of Kobe Steel’s extensive supply chain to the nuclear industry, demonstrating the pervasiveness of the potential problems.[2] We called on the agency to take urgent action to launch a comprehensive investigation into the supply and widespread use of potentially flawed Kobe Steel products in the Japanese nuclear industry. Included in the demands were calls for the suspension of restart plans for the Ohi, Genkai reactors, and shutdown of the four reactors Takahama and Sendai.
As of today, the NRA has yet to issue detailed written instructions to all reactor operators to investigate the use of potentially faulty Kobe Steel components. Instead, submissions have been made by 6 of the 11 nuclear utilities and lack any substantial information and analysis.
In one example, On 13 October, it was confirmed that Shinko Metal Products Co., owned by Kobe Steel, supplied tubes to the Tokyo Electric Power Company (TEPCO) for use in heat exchangers at the Fukushima Daini nuclear plant but failed to conduct required inspections.[3 & 4]
 
For further information:
[1] The letter was signed by Green Action, Mihama-no-kai, Citizens Nuclear Information Center, Citizen’s Watch on Nuclear Regulator, Friends of the Earth Japan, and Greenpeace Japan
[2] The Kobe Steel Group Supply Chain to the Nuclear Industry And Safety Implications (Greenpeace Japan Briefing Paper)
[3] See the TEPCO’s announcement (in Japanese)
[4] For more information on the risks of faulty steel in these components, see: “Irregularities and anomalies relating to nuclear reactor primary coolant circuit components installed in Japanese nuclear power plants”
 
Contacts:
Chisato Jono, Communications Officer, Greenpeace Japan, email: chisato.jono@greenpeace.org, mob: +81 (0) 80-6558-4446
 
Shaun Burnie, senior nuclear specialist, Greenpeace Germany, email: sburnie@greenpeace.org, mob: +49 151 643 20548 (Germany)
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December 1, 2017 Posted by | Japan | , , , | Leave a comment

Kobe Steel scandal: ‘look the other way’ culture of corporate Japan, faked data for over a decade

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The Kobe Steel scandal: What we know so far
It’s the latest big scandal to rock corporate Japan.
Kobe Steel (KBSTY), a century-old industrial giant, has admitted to falsifying data on products sold to top customers like Boeing (BA) and Toyota (TM).
It says as many as 500 companies could be affected, including manufacturers of Japan’s famous bullet trains.
Here’s the lowdown on the crisis that’s rippling through major industries around the globe:
What happened?
Essentially, Kobe employees faked reports to make it look as though products met the specifications requested by customers when in fact they didn’t.
The scandal initially concerned copper and aluminum parts, but has spread to steel products, too. It has raised doubts about thousands of tons of material shipped over a period of more than 10 years.
For the aluminum and copper parts, false data was given about their strength and durability.
Which industries?
Kobe steel sells metal to all kinds of different businesses. Some of the main industries to which it has supplied the suspect products include aviation, automobiles, railways and nuclear power.
Who’s affected?
In the aerospace industry, Boeing and Japan’s Mitsubishi (MHVYF) both used Kobe parts made with falsified data in their aircraft. But the two companies insisted they don’t believe the parts present a safety concern.
Japanese automakers Toyota (TM), Honda (HMC) and Nissan (NSANF) acknowledged they had used affected Kobe materials but were still assessing the consequences for their vehicles.
Ford (F) has said it found aluminum parts in the hood of its Mondeo model in China, but can’t confirm if they were sourced during the affected period.
Other big companies — including GM (GM), Mazda (MZDAF) and plane-maker Airbus (EADSF) — said they haven’t found any suspect parts so far but are combing their supply chains regardless.
The future of Kobe Steel is unclear, but it looks bleak right now. Its stock has nosedived 40% since the revelations first emerged.
Some analysts have warned the company could go bust, and others have suggested it could be broken up and sold off to rivals.
Kobe hasn’t put a number on the likely size of the financial hit from the scandal. The firm’s CEO has said it will bear the costs of any product recalls by its customers. He is also leading an internal probe into what happened.
Doesn’t this sound familiar?
Japan Inc has amassed a growing pile of embarrassing scandals in recent years.
They include Takata’s deadly airbags, Mitsubishi Motors’ fudged fuel-efficiency tests and Toshiba’s damaging debacles over its accounting and nuclear power business.
 
Japan’s Kobe Steel May Have Faked Data for Over a Decade
Kobe Steel Ltd. said it will co-operate with the U.S. Department of Justice after the agency requested documents related to the fake data scandal that risks engulfing Japan’s third-biggest steelmaker.
Kobe has said some 500 companies worldwide are in a supply chain tainted by admissions that it falsified certifications on the strength and durability of metals going back to 2007, including automotive giants Ford Motor Co. and General Motors Co. and the U.S.’s biggest plane maker, Boeing Co. The besieged Japanese company said in a statement it can’t yet quantify the impact of the crisis on its earnings.
The DOJ’s involvement means the company is “going to have to go overboard to be cleaner than clean,” said Alexander Medd, managing director of Bucephalus Research Partnership Ltd. in Hong Kong. “This is going to require a complete mental shift and rebuilding of trust.” Japan’s Ministry of Economy, Trade and Industry has also asked the company for a report on the scandal including causes and remedies.
Kobe’s global review of its units will probably reveal that data falsification began even longer than 10 years ago, according to a company executive, asking not to be named as the information isn’t public. The Nikkei newspaper reported Tuesday that irregularities over quality control at Kobe’s plants in Japan date back decades, citing a person it didn’t identify.
As the steelmaker works to contain the fallout, it has briefed analysts that short-term liquidity isn’t an issue as it seeks to generate cash including via asset sales.
Kobe Steel is also considering the sale of its real estate unit, the executive said. Jefferies Japan Ltd. analyst Thanh Ha Pham said that, while the company has enough cash and funding to cover short-term needs, it’s looking to raise money by lowering working capital and through asset sales, according to a note that followed a briefing with Kobe’s management on Monday.
Last week saw Kobe’s stock collapse 41 percent as investors rushed to punish the latest instance of corporate malfeasance in Japan, following similar misconduct around data at companies such as Mitsubishi Motors Corp. and Asahi Kasei Corp. It has since pared those losses, closing 3.1 percent higher in Tokyo on Tuesday for a two-day gain of 6 percent.
Kobe Steel could face losses of as much as 200 billion yen ($1.8 billion) in a worst-case scenario arising from its misconduct, according to Nomura Securities Co., while Japan Credit Rating Agency has placed the company’s A rating on watch for a possible downgrade.
A QuickTake Q&A explainer on the Kobel Steel data scandal
Nomura’s tally assumes customers would be forced to recall products and then have Kobe assume the cost, and that it will have to pay compensation, including to investors, credit analyst Shintaro Niimura said in a report Monday. The bank estimates that about 30 percent of Kobe’s aluminum and copper, two of the metals subject to data falsification, is bought by automakers.
Capital Adequacy
Still, with about 700 billion yen in capital, the worst case would only put a dent in Kobe’s capital-adequacy ratio, which would fall from 30 percent to 23 percent, according to Niimura. He cautioned that losses could widen if evidence comes to light that the scandal has affected more products than reported so far by Kobe, which on Friday added another nine to the list, including core steel products, to make 16.
The units implicated in the crisis make the steel, copper, aluminum and other materials that account for over half the company’s revenue.
Kobe’s property unit, Shinko Real Estate Co., had fixed assets of 89.9 billion yen, according to a March filing. The company is considering a number of sales options for the business, which leases and sells real estate, including a full divestment, according to the executive, although he said the sale isn’t linked to the company’s wider problems.
None of Kobe’s customers has so far raised specific safety concerns or recalled products. Jefferies’ Pham cited management as saying that customer feedback, including from beverage can producers and railway companies, is that no immediate recalls are required and products involved are not a safety concern.
Some of Japan’s biggest automakers — Toyota Motor Corp., Nissan Motor Co. and Subaru Corp. — are investigating whether any car parts contain falsified materials from Kobe, according to company spokespeople. Toyota supplier Denso Corp. is also checking its products, while Tokyo Metro Co. and Seibu Railway Co. are investigating if Kobe’s aluminum parts are used in their trains.
Kobe Steel declined to comment on the details of the analyst meeting on Monday. A spokeswoman said it’s investigating past records to determine the cause of the falsifications.
 
Scandal-hit Kobe Steel has a ‘look the other way’ culture, they say in hometown
KOBE, Japan (Reuters) – The fresh university graduate, eager to make a good impression on the job at one of Kobe Steel Ltd’s (5406.T) main plants in Japan, punched the wrong measurements into machines making steel pipes, causing a large batch to come out too short.
“I thought I was going to be fired,” recalled the former employee nearly 40 years later. But Shinzo Abe, now Japan’s prime minister, stayed on the job at Japan’s third-largest steelmaker for three years before entering politics in 1982.
Abe has called the steel industry the backbone of the nation. Kobe Steel, a 112-year-old company in south-central Japan’s Hyogo prefecture, has risen from wartime devastation and natural disaster but its past is littered with examples of corporate misconduct.
Its admission last month that workers had tampered with product specifications for at least a decade is the latest in a string of scandals that has battered Japan’s reputation as a manufacturing powerhouse.
Clients around the world, including top carmakers and airplane manufacturers, have been scrambling to check whether the safety or performance of their products have been compromised.
Workers, executives and shopowners in Kobe, a gritty, industrial city bordered by sloping hills where cattle are bred for the famed Kobe beef, said they were concerned but not surprised by the scandal.
Kobe Steel, which has apologized for the tampering, declined comment for this article.
“The corporate culture was to look the other way even while you saw what was going on,” said a retired employee who worked at the company’s flagship steel plant, Kobe Works – a symbol of the city’s quick recovery from a 1995 earthquake that killed more than 5,000 people. The company’s other main plant in the area is Kakogawa Works, in the nearby city of Kakogawa.
“They were supposed to be instilling a culture that paid attention when improprieties were discovered,” the former employee said. “In the end they didn’t create such a corporate culture. That’s management’s responsibility.”
The company initially said some workers had falsified data on contract specifications for a relatively small amount of aluminum and copper products, but it later admitted the problem had spread.
In 2006, Kobe Steel admitted falsifying soot-emissions data from the blast furnaces at Kobe Works and Kakogawa Works.
The latest scandal reflects “exactly the same set-up”, said Shoichi Tarumoto, who was then mayor of Kakogawa. “It looks like nothing has changed at Kobe Steel.”
PAST PROBLEMS
Kobe Steel has admitted taking part in bid-rigging for a bridge project in 2005, and failing to report income to tax authorities in 2008, 2011 and 2013. The company exceeded established limits for ground and water pollution in 2006.
Illegal political funding to candidates in local assembly elections in 2009 prompted the resignations of the then CEO and chairman. And last year Kobe Steel admitted a subsidiary falsified data on stainless-steel products.
A senior official in local government who has dealt with the company for years said: “Kobe Steel always scouts the backstreets for shortcuts. That’s their nature.”
Although its local dominance has waned, Kobe Steel remains one of only two Kobe-based companies, along with Kawasaki Heavy Industries Ltd (7012.T), that have revenues over 1 trillion yen ($9 billion) a year. The Kakogawa Works is that city’s biggest company, vital as a local taxpayer and employer.
More than a third of the Kobe Steel group’s 6,123 domestic customers are concentrated in Hyogo or neighboring Osaka, according to credit-research firm Teikoku Databank. More than half its customers are small and midsize Japanese companies.
The other clients are spread around the world and include top automobile manufacturers, airplane makers, railways and nearly any industry that uses steel, aluminum or copper in any form.
No safety issues have been found so far because of the tampering, but Kobe Steel has withdrawn its forecast for its first annual profit in three years. Whatever the eventual economic impact, the scandal is already affecting morale in Kobe city.
“If Kobe Steel suffers a blow, this is the area that will be most affected,” said Tsuyoshi Matsuda of Teikoku Databank’s Kobe office.
Kobe Steel acknowledges some customers have shifted orders to other suppliers. Major banks are instructing their Kobe area branches to keep close watch on the credit management at companies that do business with the steelmaker, bankers say.
“HEAVY MOOD”
The scandal “isn’t an open topic on the job,” said a worker in his 30s, finishing the night shift around 8 a.m. at Kobe Works, a hulking jumble of rusting pipes, risers and tanks.
“Nobody says it out loud, but I think people are worried,” he said. “It’s a heavy mood.”
Shinzaike, the local train station closest to Kobe Works, is home to several bar-restaurants that count the company’s employees among their best customers. Since the latest scandal erupted, business has dried up, traders said.
“Looks like they’re holding back from going drinking,” said a pub owner.
Reservations for year-end parties would normally be starting now, but there haven’t been any yet, he added.
Abe, who worked at both the Kobe and Kakogawa works, has called his years at Kobe Steel “the starting point of my adult life.”
Last year, according to media reports, he urged young people entering the workforce to follow his example of learning from mistakes at Kobe Steel.
“I got through it without incident,” he said. “I want you not to be discouraged by a few mistakes but rather do the best you can.”
 
Kobe Steel blames data scandal on focus on profit, lack of controls
TOKYO (Reuters) – Kobe Steel Ltd said on Friday a lack of quality controls and a focus on profits was behind the widespread data tampering that has shaken up the supply chains of car and plane makers around the world.
Japan’s third-largest steelmaker, which has posted losses in the last two business years, promised to automate more of its operations and reorganize its quality control systems to recover from one of the nation’s biggest corporate scandals.
The 112-year-old company admitted last month that workers had tampered with product specifications, causing global automakers, aircraft manufacturers and other companies to check whether the safety or performance of their products had been compromised.
No safety issues have so far been identified from the data cheating, which mainly involves falsely certifying the strength and durability of products.
Kobe Steel was ordered last month by the Ministry of Economy, Trade and Industry (METI) to provide a detailed explanation of the data cheating and say what steps it would take to prevent future abuses.
“Improving our management and corporate governance and instilling a culture where employees can say anything are imperative,” Chief Executive Officer (CEO) Hiroya Kawasaki said at a press briefing after submitting its report to the government. “This is my utmost priority and I will work on these with unflagging resolve,” he said.
Kawasaki said his “ultimate management responsibility” will be decided after recently appointed outside investigators report back to the company.
“Given the magnitude of the scandal, we expect upper management to get the boot,” Thanh Ha Pham, an analyst at Jefferies in Tokyo, wrote in a note on Friday, without saying when that might happen.
Multiple workers and managers at nine production sites were involved in tampering data on specifications of products, the company said in its internal report.
Some of the fabrication of data went on for 10 years, Managing Executive Officer Koji Yamamoto said, though he could not say when exactly it started.
The company is in talks with fewer than 10 customers who want to recover the costs of safety inspections, Managing Executive Officer Yoshihiko Katsukawa said.
“Clarifying your company’s thinking on the causes of this incident is a meaningful step towards restoring trust,” Akihiro Tada, director general of METI’s manufacturing industries bureau, told Kawasaki as he arrived to deliver the report.
Kobe Steel, also subject of a U.S. Justice Department inquiry as well, has had a Japanese government-sanctioned seal of quality revoked on some of its products and lost customers.
As of Friday, the company said 474 out of 525 affected customers found no safety issues or their products were deemed safe by Kobe Steel, up from 470 earlier this week.
The company has said it cannot yet fully state what impact the tampering will have on its finances. Last week, it pulled its forecast for its first annual profit in three years for the 12 months through next March.
Kobe Steel’s shares have fallen by nearly a fifth since it revealed the data fabrication a month ago.
The company’s shares rose nearly 2 percent on Friday, while the Nikkei 225 fell 0.8 percent.
 
Kobe Steel Blames Plant Managers for Quality Control Scandal
TOKYO — When a roll of aluminum produced at a Kobe Steel factory fell short of customers’ exacting demands for qualities like strength, plant managers were supposed to make a painful but necessary decision: Start again and make a new, better roll of metal, even if it cost the company time and money.
But for at least a decade, according to an internal company report released on Friday, those managers took an easier way out, manipulating test data on some products to avoid expensive do-overs.
The report by the Japanese steel maker is its first public accounting of the causes of a data falsification scandal that has shaken the company and prompted around 500 of its customers around the world — including manufacturers of cars, trains and aircraft — to scramble to verify their products’ safety.
The report, produced by Kobe Steel without input from regulators or other outside parties, concluded that the company had erred by elevating the pursuit of short-term profit over the maintenance of scrupulous quality standards. That failing, it said, was exacerbated by lax oversight by senior executives and an “insular” corporate culture that discouraged employees from questioning improper but long-established practices.
“There was a climate where employees on the ground couldn’t speak up. Even if they did speak up, it wouldn’t make a difference,” Kobe Steel’s chief executive, Hiroya Kawasaki, said at a news conference. “As long as the revenue was coming in, management wasn’t interested.”
Mr. Kawasaki said that the practice of misrepresenting not-quite-perfect metals was at least a decade old but that, because records going back further than that were incomplete, it might have been going on longer.
A second report on the scandal, by a commission of outside experts, will be completed by the end of December, he said.
In a series of announcements beginning last month that have rattled corporate Japan, Kobe Steel acknowledged faking data about the quality of aluminum, copper and other products to make it appear as though they met standards promised to customers when in fact they did not.
The metals still met basic safety requirements, according to the company and customers who have reviewed their purchases from Kobe Steel. Nonetheless, the episode has reverberated through global supply chains and dealt a fresh blow to Japan’s reputation for scrupulous, dependable manufacturing.
The report published on Friday outlined several changes the company plans to make to prevent cheating, including automating record keeping for product tests and requiring multiple employees to verify that test results are accurate.
The report faulted what it said was Kobe Steel’s excessively segmented structure, saying that the company’s seven separate divisions — which produce products ranging from aluminum used by automakers to steel for the construction industry — had become insulated fiefs where problems could fester.
Top managers escaped direct blame for the scandal: The report said there was no evidence that they were aware of the data falsification, though it criticized executives for setting unreasonable production targets and then failing to scrutinize how subordinates met them, or at least appeared to meet them.
“The fact that management did not grasp what was happening on the front lines is in itself a major problem,” it said.
 
Kobe Steel quality scandal driven by pursuit of profits and demanding corporate culture
Scandal-hit Kobe Steel’s troubles were driven by a relentless focus on profits and the company’s regimented corporate culture, which led to more than decade of faked quality guarantees on its products.
Japan’s third largest steel-maker said it “sincerely and deeply apologised for the enormous amount of worry and trouble we have caused” as the findings of an investigation into its problems emerged.
A 27-page document detailing what went inside Kobe – which has been loss-making for the two years – said failed quality controls were behind testing data being altered.
The report said that “a severe management environment” with demanding profit targets had contributed to the scandal.
The investigation into the issues which affected more than 500 customers – including those in the aerospace, transport and nuclear industries – was ordered by Japanese government.
Customers of Kobe included Toyota and Nissan, along with international clients such as Boeing, General Motors and Daimler. The scandal – which affects aluminium, copper and steel products – has sent Kobe’s customers racing to check components acquired from the company, though no safety problems have yet been identified.
In the wake of the report, Kobe has promised to transform itself with more automation and better quality controls.
In an update on checks into the affected products on Friday, Kobe said 474 of the 525 affected customers had not identified problems or Kobe had satisfied itself the products were safe.
News of the scandal saw shares in Kobe plunge as much as 40pc and Hiroya Kawasaki, president of Kobe, admitted that “trust in our company has fallen to zero”.
Customers have been deserting the business, causing Kobe to scrap financial forecasts. Naoto Umehara, executive vice-president, signalled the scandal could kill the company, warning Kobe “may incur extraordinary losses”.
Reports of the malfeasance at Kobe is just the latest of a string of scandals that have rocked corporate Japan, with companies including Nissan, Toshiba and Olympus also having been revealed to have suffered huge issues. 

November 30, 2017 Posted by | Japan | , | Leave a comment

Kobe Steel Scandal Grows to Include Subsidiaries, 500 Firms Hit by Cheating Scandal

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Kobe Steel’s chief executive, Hiroya Kawasaki, at a news conference in Tokyo on Friday. “We are trying to understand how this could possibly happen at so many subsidiaries, including overseas,” he said.

Kobe Steel Scandal Grows to Include Subsidiaries

 
TOKYO — A scandal about falsified quality data at Kobe Steel expanded on Friday, as the Japanese steel maker said nine subsidiaries, including several outside Japan, had either failed to carry out required product checks or lied about the results.
Including products sold by the subsidiaries, Kobe Steel said it now estimated that it had shipped substandard or potentially substandard materials to 500 customers, up from an initial estimate of 200.
“We are trying to understand how this could possibly happen at so many subsidiaries, including overseas,” Kobe Steel’s chief executive, Hiroya Kawasaki, said at a news conference.
Mr. Kawasaki repeated a promise to complete in two weeks an investigation into potential safety hazards related to the data falsification, and to deliver in a month the results of a broader examination of the company’s failings, which now look systemic and global.
Kobe Steel supplies metal components to industries where safety is vital, including car, train and aircraft producers, and makers of electronics and other equipment. The company says it is working with its customers to determine if any of the affected material, mostly aluminum and copper, poses a safety risk.
The subsidiaries named on Friday were three in China, one each in Thailand and Malaysia and four based in Japan. They make products like copper piping and aluminum and steel wire.
Employees at the companies are supposed to test the products to ensure that they meet design standards specified in customer contracts. Kobe Steel said that in some cases the tests had not been carried out, and that in other cases employees had recorded fake results to make it seem as though the products met customers’ standards when they did not.
Executives said the data manipulation had been deliberate.
Mr. Kawasaki said that Kobe Steel’s international investigation was continuing, and that more cases of data falsification could emerge. The revelations so far have reverberated through supply chains and cast a shadow over Japan’s reputation for precision manufacturing.
Ford Motor said late Thursday that the only use of Kobe Steel aluminum that it had established in its worldwide operations involved a hood for Ford Mondeo sedans produced in China. It said it did not know if the aluminum was substandard, but said it was not being used structurally, so safety was not at issue.
The scandal also touched Japan’s embattled nuclear industry. Tokyo Electric Power, owner of the Fukushima Daiichi nuclear power plant, which experienced meltdowns after a tsunami struck it in 2011, said Friday that it had sourced improperly certified copper piping from Kobe Steel.
Tokyo Electric said the piping, which it bought for use at its Fukushima Daini nuclear power station, near Fukushima Daiichi, had not been checked to ensure it met size requirements. But it said the piping had never been installed, and was in storage, and did not pose a safety threat.
Kobe Steel said on Sunday that employees had altered inspection certificates on aluminum and copper products from September 2016 to this past August, constituting about 4 percent of the company’s output of those items during the period, but that it was examining other possible episodes of data falsification going back 10 years.
On Wednesday, Kobe Steel added two more products to the list of affected materials: powdered steel, which is used to create molded steel products like gears, and “target material,” a specialty mix of metals used to produce DVDs, television screens and other electronics equipment.
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A contrite Mr Hiroya Kawasaki, CEO of Kobe Steel, has said the company plans to pay customers’ costs for any affected products

500 firms hit by cheating scandal: Kobe Steel CEO

 
Crisis ripples through global supply chains, dealing body blow to Japan’s reputation
TOKYO • The cheating crisis engulfing Kobe Steel just got bigger.
Chief executive Hiroya Kawasaki revealed yesterday that about 500 companies had received its falsely certified products, more than double its earlier count, confirming widespread wrongdoing at the steelmaker that has sent a chill throughout global supply chains.
The scale of the misconduct at Japan’s third-largest steelmaker pummelled its shares as investors, worried about the financial impact and legal fallout, wiped about US$1.8 billion (S$2.4 billion) off its market value this week.
As the company revealed tampering of more products, the crisis has rippled through supply chains across the world in a body blow to Japan’s reputation as a high-quality manufacturing destination.
A contrite Mr Kawasaki told a briefing the firm plans to pay customers’ costs for any affected products. “There has been no specific requests, but we are prepared to shoulder such costs after consultations,” he said, adding that products with tampered documentation account for about 4 per cent of the sales in the affected businesses.
Kobe Steel initially said 200 companies were affected when it admitted last weekend that it had falsified data about the quality of aluminium and copper products used in cars, aircraft, space rockets and defence equipment.
Asked if he plans to step down, Mr Kawasaki said: “My biggest task right now is to help our customers make safety checks and to craft prevention measures.”
​Boeing has some of the falsely certified products, a source with knowledge of the matter said, while stressing that the world’s biggest maker of passenger jets does not consider the issue a safety problem.
More than 30 non-Japanese customers had been affected by the firm’s data fabrication, the Nikkei newspaper reported yesterday. A Kobe Steel spokesman said the companies received its products but would not confirm they had any of the falsely certified components.
Nuclear power plant parts are the latest to join the list of affected equipment as Fukushima nuclear operator Tokyo Electric Power (Tepco) yesterday said it had taken delivery of pipes from Kobe Steel that were not checked properly.
The pipes were delivered to its Fukushima Daini station, located near the destroyed Fukushima Daiichi plant, but have not been used, Tepco said, adding that it was checking all its facilities.
Faulty parts have also been found in Japan’s famous bullet trains that run at speeds as high as 300kmh and a space rocket that was launched in the country earlier this week. One bullet train operator has already said it will seek compensation from Kobe Steel.
The government has ordered Kobe Steel to address safety concerns within about two weeks and report on how the misconduct occurred in a month. No safety issues have yet been identified in the unfolding imbroglio.
The company’s shares fell nearly 9 per cent yesterday and have fallen more than 40 per cent since the scandal broke.
Kobe Steel, founded in 1905, is a pillar of Japan’s manufacturing sector. Such are its establishment bona fides that Prime Minister Shinzo Abe, scion of a political dynasty, worked at the company decades ago, before entering politics.
But those credentials have now been shattered, a point amplified by Mr Kawasaki who earlier said the credibility of the firm “has plunged to zero”.
 

October 14, 2017 Posted by | Japan | , | Leave a comment

Kobe Steel discloses 9 more cases of faked inspection data

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Kobe Steel President and CEO Hiroya Kawasaki speaks during a press conference in Tokyo, Friday.
TOKYO – The scandal over product inspections data faked by Japanese materials and machinery giant Kobe Steel expanded Friday to include products shipped to more than 500 customers.
Kobe Steel’s president, Hiroya Kawasaki, told reporters the company had uncovered nine more types of products whose inspections had been faked or manipulated, including copper alloy pipes and steel wire rods used in vehicle tires and engines.
The problems disclosed by Japan’s third-largest steel maker are just the latest in a slow of product quality, accounting and corruption scandals that have dented Japan’s image of superior manufacturing prowess.
The latest problems were discovered with shipments of more than than 11,000 tons of steel, copper, and aluminum products made by Kobe Steel and its affiliates in Japan, China, Malaysia and Thailand, the company said.
Kawasaki at times appeared close to tears while explaining how it was that the company had chosen not to disclose some of the cases that had been discovered much earlier and discussed at past board meetings.
“I apologize again for the tremendous trouble that we have caused to our customers and consumers,” he said. “We are conducting a thorough analysis of the problem. The analysis will be key,” he said.
Kawasaki said he did not expect any product recalls due to the misconduct.
The exact extent of the problem remains unclear since Kobe Steel has not identified the customers affected. But the company is a major supplier to many manufacturers, including automakers, aircraft manufacturers, semiconductor factories and nuclear power plants.
Other materials it said were affected by bogus inspections or faked data include steel powder, aluminum flat-rolled products and castings, copper strips and tubes and forgings.
Tokyo Electric Power Co said Friday it had bought a backup duct for a heat exchanger for one of four reactors at one of two nuclear power reactors in northeastern Japan’s Fukushima that narrowly survived the 2011 tsunami despite some damage.
TEPCO said in a statement that a Kobe Steel subsidiary, Shinko Metal Products Co., informed it the product came with inappropriate measurement data.
There is no concern over safety because the duct was bought as a backup and was not used.
TEPCO said it has requested further investigations by Kobe Steel of products shipped to the utility and its subsidiaries. TEPCO is also investigating.

October 14, 2017 Posted by | Japan | , | Leave a comment