Kobe Steel's Data-Fabrication Stuns Japanese Manufacturers

Japan's government sought on Tuesday to contain the fallout from the disclosure by the nation's third-biggest steel maker, Kobe Steel Ltd, that it had fabricated data on components used in cars, aircraft and space rockets, sending shock waves through the Japanese manufacturing sector. Faced with the latest in a series of missteps that have undermined Japan's reputation for high-quality production, the industry ministry instructed Kobe Steel to assess the safety impact from the scandal.

The company said products used by about 200 companies were certified with falsified data. They included Toyota Motor Corp, Central Japan Railway, Mitsubishi Heavy Industries, Mazda Motor Corp and Subaru Corp, the companies confirmed.

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Analysts say the announcement further tarnishes the reputation of Japan's globe-trotting manufacturers, long celebrated for their high-quality products. It could also undermine confidence in Prime Minister Shinzo Abe's moves to improve corporate governance as part of his program of Abenomics.

The admission from the steel and aluminum maker follows scandals involving falsified data at household names such as Nissan Motor, Mitsubishi Motors and Takata Corp., which filed for bankruptcy earlier this year.

Toshiba Corp is still battling the fallout of a scandal involving reporting inflated profits.

Toyota called the revelations a "grave issue," and said it was making checks on where the components were used and what effect they have on products using them.

Kobe Steel shares closed at the limit low after being untraded for the whole session, diving 22 percent to 1068 yen.

Impact On Kobe Customers Unclear

In a statement on Sunday Kobe Steel said some aluminum and copper products shipped from September 2016 to August 2017 were falsely labeled.

Kobe Steel said the misconduct involved dozens of staff and possibly stretched back 10 years. It apologized and said it had appointed lawyers to investigate.

Aluminum castings, forgings and flat-rolled items, along with copper strips and tubes were among the products affected, the company said in a statement.

"These are improper actions that could shake the foundation of fair trade," Yasuji Komiyama, director of the industry ministry's metal industries division, told reporters at a briefing on the revelations.

"We want Kobe Steel to make the utmost effort to restore trust from society", he said.

A Kobe spokesman told Reuters the firm is working with customers to check for any issues. "To our knowledge it has not affected any customer's products at this stage," he said.

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

"Nothing in our review to date leads us to conclude that this issue presents a safety concern," it said. Kawasaki Heavy Industries and Mitsubishi Heavy Industries (MHI) supply parts to Boeing including for its 777 Dreamliner.

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. There were no technical problems with the components, MHI said.

Industry ministry officials said Kobe Steel materials were used in some defense equipment made by Kawasaki Heavy, MHI, IHI Corp and Subaru and checks were being made for any safety issues.

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)