Kobe Steel scandal deepens as two more products under suspicion

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                                                            |By Yuka Obayashi

Image Zoom |By Yuka Obayashi

Toyota, Nissan, Honda, Mitsubishi Motor, Subaru and Mazda joined aviation firms and defence contractors Mitsubishi Heavy Industries, Kawasaki Heavy Industries and IHI that have used the steel maker's products.

Japan's trade ministry is taking the Kobe Steel data fabrication scandal as a serious matter that affects trust in the country's manufacturing industry, a senior official said on Thursday.

"The credibility of Kobe Steel has plunged to zero".

Earlier the company said that in the year up to August 31 it had sold materials such as aluminum flat-rolled products, aluminum extrusions, copper strips, copper tubes and aluminum castings and forgings using falsified data on such things as the products' strength.

Akihiro Tada, director of the ministry's Manufacturing Industries Bureau, urged the company to move quickly in resolving the problems, which are thought to have affected numerous country's largest manufacturers.

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"It seems in some cases quality control was undertaken by veteran employees who had lots of experience, highly trusted within the organisation, and somehow these discrepancies slipped by them", company spokesperson Gary Tsuchida said.

Investors have also rushed to unload Kobe Steel's bonds, causing the extra yield demanded to hold the securities over Japanese government notes to jump.

The latest discovery was of falsification of data on 140 tons of steel powder supplied to one customer in fiscal 2016, between April 2016 and March 2017.

MHI said Kobe Steel products were used on its Mitsubishi Regional Jet and rockets, including a H-2A rocket launched on Tuesday to put a navigation satellite into orbit.

Honda spokesman Tamon Kusakabe told AFP: "As to safety, we are still studying (a possible) impact".

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Kobe Steel President Hiroya Kawasaki said on Thursday his company would do the utmost to investigate the reason for the tampering and take measures to prevent further occurrences. "But we are still investigating and it's premature to say" if recalls will be necessary or not, he said. Toyota said it uses materials from Kobe in bonnets, rear doors and other auto parts. It was not clear whether the scandal affected the safety of their products.

"We can't rule out the possibility that the external investigation will find other cases", Katsukawa said, adding no customers had raised any safety issues or stopped buying its products.

Boeing said in a statement it was working "with our suppliers since being notified of the issue".

"Verification and inspection to date have not recognized specific problems casting doubts on the safety of the nonconforming products", it said.

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