Faked Japanese aluminium data is no joke for planes, trains and automobiles

Copper Pipe

Will Kobe Steel become the next "Takata airbag" scandal to hit Japan? The company works with several major auto manufacturers including Toyota, Honda, Nissan, Mazda, Mitsubishi, Subaru, Ford and General Motors.

Aluminum is widely used in cars, planes and high-speed trains in Japan which use the light-weight metal to increase fuel efficiency.

Kobe Steel said on Sunday that some of its aluminum and copper products were subjected to data fabrication, and the misconduct started as early as 10 years ago.

The falsification was meant to make the metals look as though they met client quality standards.

After conducting an in-house probe, Kobe Steel - which once employed Japanese Prime Minister Shinzo Abe - on Sunday admitted it had shipped products that did not meet client specifications, including strength data.

Boeing, which gets some parts from Subaru, said there was nothing to date that raises any safety concerns.

Shares in Kobe Steel plunged 22% today after the Japanese metals firm admitted to falsifying product data.

Kobe said that at present there was no evidence that the "nonconforming" products would compromise safety.

Toyota said Kobe Steel supplied materials to one of its Japanese factories, which used them in hoods, rear doors and surrounding areas of certain vehicles. A spokesman said: "We are rapidly working to identify which vehicle models might be subject to this situation and what components were used". "We recognize that this breach of compliance principles on the part of a supplier is a grave issue".

Japan's Nikkei share average moved closer to a 21-year high on Tuesday after a three-day weekend as expectations for continued strength in the US economy supported sentiment, but Kobe Steel's shares plunged when it said it had fabricated data. The impacted products include about 19,300 tons of flat-rolled and extruded aluminum parts, about 2,200 tons of copper strips and tubes, and about 19,400 units of aluminum castings and forgings. The rocket cleared all safety checks before launch, the company said.

Railway companies including East Japan Railway Co. and Central Japan Railway Co. said that the problematic products had also been used in some of the Shinkansen bullet trains. Kobe Steel's aluminum and copper operations account for about 20 percent of total sales, according to data for the quarter ended June 30.

A rocket it launched yesterday reportedly had materials sourced from Kobe Steel.

This latest scandal threatens to further undermine confidence in the quality of Japanese manufacturing.

"Aluminium is a strategic business for Kobe Steel", said Irisawa at Tachibana Securities.

Related news: