[nakul0888]

Its seems to be a marathon of back to back corporate scandals for the global automotive sector

In recent times there was the takata air bag scandal, Mitsubishi fuel economy fudging scandal, the infamous dieselgate and now the Kobe steel has been caught with its pants down in a new steelgate scandal which could impact the auto industry on a global scale. Also affected will be bullet trains, planes power plants. Oh boy!

Japan’s Kobe Steel has admitted that about 500 customers are affected by its worsening falsified data scandal – more than double the number first estimated – including some of the world’s top car-makers.

According to Japan’s daily Nikkei business paper, more than 30 foreign customers were affected, including Toyota, Nissan, Honda, GM, Tesla, Daimler and PSA Peugeot-Citroen, plus airliner manufacturers Boeing and Airbus.

The news came on Friday as Kobe Steel stocks continued to fall — down more than 40 per cent or $US1.8b since early this week, when it admitted to falsifying strength and quality data for a range of products.

Kobe Steel had previously admitted to falsifying quality data for products sold to around 200 clients, and says the practice may have started a decade ago.

“Combined with previously announced clients, it will total about 500 firms,” said a senior executive from Japan’s third-largest steel-maker, Yoshihiko Katsukawa.

Kobe Steel 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 moulds and steel wire rods used in vehicle tyres and engines.

The company said the latest problems were discovered in shipments of more than 11,000 tons of steel, copper, and aluminum products made by Kobe Steel and its affiliates in Japan, China, Malaysia and Thailand.

Kawasaki attempted to explain why the company had chosen not to disclose some of the cases that had been discovered much earlier and discussed at past board meetings, including steel powder, flat-rolled aluminum, castings, copper tubes and forged products.

“Right now, our top priority is to find out the cause and take preventive measures, and to determine if our inadequate products affected our customers,” he said.

“I plan to put all my energy into that effort. I’m most troubled by the magnitude and the extent to which this problem has spread,” Kawasaki said.

Kobe Steel says it does not expect any product recalls due to the misconduct, but the full extent of the scandal remains unknown since it has not identified which products are affected for which customers.

The 112-year-old company is a major supplier to many manufacturers, including car-makers, railways, aircraft builders, semiconductor factories and nuclear power plants.

Kobe Steel supplies half of the world’s wire rod and half of Japan’s aluminum car bonnets, and also produces components for the country’s iconic Shinkansen bullet train

Source:motoring.com

Toyota is presently looking into this headaches impact on its Indian operations.

Japanese auto major Toyota today said it is studying the possible impact in India with regard to supplies by Kobe Steel which is mired in a controversy over falsification of data on the quality of its products.

Toyota, Honda, Nissan and Ford are major automobile companies to which Kobe Steel had supplied its products.

Ford said its models in India are not affected by the issue.

Source: economictimes.com

[GTO]

Damn scamsters. And this one is huge - even affects planes & trains!

The Takata scandal, Mitsubishi's lies, Honda's drop in quality, niggles in Toyotas & now this - something is definitely not right in Japan. Once upon a time, Japan was the king of cars & electronics. Not anymore in either category.

Autoweek says it could impact tyres as well:

Following on reports that Kobe Steel, one of Japan’s leading steel manufacturers, manipulated manufacturing data for its copper and aluminum production, new information claims the company also falsified data for its steel manufacturing. According to Bloomberg, Kobe Steel falsified quality certification data for steel wire. Parts using this type of wire can include belts in radial tires and critical internal engine parts like valve springs. There aren’t any reported recalls associated with this announcement at the time of writing, but considering the risk, that’s bound to change.

[A350XWB]

Originally Posted by GTO

The Takata scandal, Mitsubishi's lies, Honda's drop in quality, niggles in Toyotas & now this - something is definitely not right in Japan. Once upon a time, Japan was the king of cars & electronics. Not anymore in either category.

True. There used to be a time when people used to swear by the quality of something, if it had the "Made in Japan" label. Not any more I suppose. Maybe the competition from other parts of Asia is getting them.

[Arjun Reddy]

Now this will be full blown. Each company now needs to see if Kobe Steel supplies steel for each part/ component and also structure.

There could be a case for structural integrity for vehicles as well. Only further investigation from individual auto companies will bring out the full data. :

Hyundai will remain unaffected by this as I am guessing they have their own steel plants.

[ashis89]

Does anyone have insights into how such mega scandals are eventually revealed and how these companies and/or their officials have been able to cover it up for years and even decades?

I see that several OEMs of various transport industries are their customers. Don't OEMs perform QA and QC tests on these raw materials, at least periodically, before they use it in their products?

On a side note, VW scandal was too big but the focus on the issue is long gone. The company continues to enjoy a healthy demand for its products.

The software patch given to existing users is seems to be changing the vehicle performance significantly. Now isn't it another cheating for the customer? While purchasing, the customer could have selected the car for the power, performance and engine smoothness. Now it's all gone but the customer is not compensated for this loss. Makes me wonder why the existing VW users don't take legal route against the company? Or it isn't possible to fight here because of lack of such laws? I am a total noob here.

[sudev]

Steel can be easily tested and is tested so many times in component manufacturing. Winner what sorry if technical repression is being disclosed.

Profits drive many corporate actions.

[14000rpm]

Originally Posted by GTO

Damn scamsters. ..

While crime in general is negligibly low in Japan, white crime is quite rampant. It is more cultural than anything. Even if somebody has noticed something 'off', there is a general 'hush hush' about the same and get brushed under the carpet.
my comments are not merely spit balling. It comes from some senior folk that I know in Takata in Michigan.

[Jeroen]

I really wonder how the various industries affected are going to deal with this. How to figure out what piece of steel ended up in which plane, car, tyre etc.

Aviation industry is usually very good about keeping track on traceability on parts and components. And the car industry can usually trace components (e.g. air bags).

But we are talking about sheets of metal that were stamped into say a part of chassis. Do they keep track of which sheets of metal have ended up in which model and series of car. Not sure if the aviation industry can track it down to that level.

This is a huge thing of course, but then, have we seen any mishaps due to the insufficient quality of the steel delivered?

i would be interested to understand what was wrong with this steel and to have some insights as to what it really means. Most likely will depend heavily on the application of the steel I would think.

Jeroen

[Hells Bells]

Very interesting to read that Kobe believes no recalls will be triggered. Considering you sold a component which impacts the very structural rigidity of the end product, what makes them so confident? Unless they realize you can't fix through a recall as the only fix is replacement of the product.

Takata went bankrupt (as I understand) as they couldn't cope up with the volumes of the recall. I can't imagine how the eventuality will be any different for Kobe!

[jomson13]

I am quite surprised to hear about this since the level of automation is very high in Japanese manufacturing industries.
Someone really went out of their way and through a lot of trouble to falsify machine generated reports!

That being said, this scandal has to potential to have wide and far reaching consequences. Lets hope they are able to trace where the material has flown and are able to verify if the products being made with this steel are safe for use.

[volkman10]

Toyota investigation on aluminium materials from Kobe Steel reveals no issues, other materials ongoing.

Toyota, which said last week that Kobe Steel aluminium-based materials were used in hoods, rear doors and peripheral areas in its vehicles, but added that the issue was limited to its plants in Japan and that factories in other countries weren’t affected.

Now, the automaker has issued a statement in response to the matter. It said its investigations had
identified the aluminium plates purchased directly from Kobe Steel, and analysis had revealed that the materials were up to all applicable statutory standards as well as its own internal standard in terms of safety and durability requirements.

Link

[comfortablynumb]

After reading so many such similar news in the so called developed countries, a couple of things strike me:
1. Human nature is pretty much more or less same all over the world.
2. Every person has his or her price, and it's not as high as you think (borrowed from one of the stories in Yes Minister)

Cheers,
Vikram

[Lone Ranger]

Originally Posted by comfortablynumb

1. Human nature is pretty much more or less same all over the world.
2. Every person has his or her price, and it's not as high as you think (borrowed from one of the stories in Yes Minister)

Very true. A universal blight that modern society has acquired is the need for instant results and the constant pressure to meet and improve short term (quarterly) targets. Under these circumstances, more and more companies are giving in to the temptation to shift a zero here, skip a check there etc. Not a good thing for the companies (in the long run), its investors or its customers, but yet we persist with this obsession with near term forecasts and endless analsysis.

[sleepyhead148]

Source:https://economictimes.indiatimes.com...w/61147103.cms

Kobe Steel said more than 200 customers, which it didn’t identify, were sold products that failed quality control tests, but there have been no reports of safety issues. A spokesman for the company said pressure to meet delivery deadlines was one reason behind the failure, but the incident is linked to the company's quality management, not its customers.

This has all the makings of another Dieselgate-level scam. With Toyota still assessing impacts of a few materials, I wonder how it'll affect their India business.

[satishv1987]

I can bet that like other major corporations, Kobe also has mandatory training modules on Ethics and General Business Principles for all its new recruits. Sometimes I feel that the higher management in global corporations assume their decisions are exempt from ethical scrutiny.