October 10, 2017

Kobe Steel Admits it Falsified Data

By the C|C Whistleblower Lawyer Team

As reported in Bloomberg, the New York Times and other news outlets

The industrial scandal engulfing Kobe Steel began to reverberate overseas as Japan’s third-biggest steelmaker said its staff falsified data about the strength and durability of some aluminum and copper products used in planes, trains and potentially a space rocket.

Companies ranging from the automakers Toyota Motor and Honda Motor to aircraft companies like Boeing and Mitsubishi Heavy Industry said they were investigating the use of rolled aluminum and other materials from Kobe in their products. They also said they were trying to determine if substandard materials had been used in their products, and if so, whether they presented safety hazards.

Kobe Steel said it discovered the falsification in inspections on products shipped from September 2016 to August 2017, adding there haven’t been any reports of safety issues. The products account for 4 percent of shipments of aluminum and copper parts as well as castings and forgings.

Kobe Steel said on Sunday that employees at four of its factories had altered inspection certificates on aluminum and copper products from September 2016 to August this year. The changes, it said, made it look as if the products met manufacturing specifications required by customers — including for vital qualities like tensile strength — when they did not.

Kobe Steel added that it was examining other possible episodes of data falsification going back 10 years. It did not provide details about the size of the discrepancies it had discovered, making it difficult to immediately determine if they posed a safety threat.

One outside estimate put the potential cost of replacing the parts at about 15 billion yen ($133 million), but the damage to the company — in the form of both reputational harm or possible legal challenges– could be much greater.

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