Fake Quality Data Could Cost Kobe Steel More than Money
The company on Sunday revealed that 21,500 tons worth of aluminum and copper strips, tubes and extrusions and 19,400 aluminum castings and forgings weren’t up to customer specifications but were shipped under the pretense that they did. The problem worsened on Wednesday when reports emerged that data related to iron powder might also have been falsified.
The admission has left Kobe Steel customers scrambling to find out whether they have defective components in use. Internal probes have been initiated by Toyota Motor Corp., Honda Motor Co. and Subaru Corp., among others, Bloomberg news service reported.
"I expect a wave of litigation as soon as people figure out what’s happened, who’s impacted and the company continues to admit things," Samuel Rudman, a partner at Robbins Geller Rudman & Dowd LLP told Bloomberg.
The New York Times said the scandal is the latest in a series of problems at Japan’s biggest manufacturers, which rely on a reputation for quality manufacturing as way to drive sales over less expensive alternatives made in China and elsewhere.
"The falsification problem has become an issue that could destroy international faith in Japanese manufacturing," The Times said, citing Japanese business newspaper Nikkei.