Nikkei edges up in choppy trade; Kobe Steel poised to plunge

Jon Howard
October 11, 2017

The products were delivered to more than 200 companies, including Toyota, Mitsubishi Heavy Industries and Subaru.

Aluminum is widely used in cars, planes and high-speed trains in Japan which use the light-weight metal to increase fuel efficiency.

After a probe done by the steelmaker on Sunday, it said that it had shipped aluminum and copper products that did not meet client specifications, including strength data.

- Honda said it used the materials in question for doors and hoods of its cars.

The falsification was meant to make the metals look as though they met client quality standards.

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

Boeing, which gets some parts from Subaru, said there was nothing to date that raises any safety concerns. The company did not say which engines used the affected products.

Subaru also produces wings for Boeing Co., but the aerospace company said nothing in its review has convinced it there's a safety issue.

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Japanese automakers including Toyota, Nissan and Mazda are investigating whether falsely labelled products supplied by Kobe Steel have impacted the safety of their cars.

"We are rapidly working to identify which vehicle models might be subject to this situation and what components were used", Toyota spokesman Takashi Ogawa said.

The company said it has inspected products shipped over the past year and found data on some 19,300 tons of aluminum products, 2,200 tons of copper products and 19,400 pieces of aluminum forging and casting products had been fabricated.

- Mitsubishi Motors said it is confirming affected models as well as whether there's impact on auto safety.

Boeing also could be impacted through another company, Japan's IHI produces some engines for the USA aircraft giant and also uses some Kobe Steel products. The rocket cleared all safety checks before launch, the company said. Kobe Steel's aluminum and copper operations account for about 20 percent of total sales, according to data for the quarter ended June 30. "If the aluminum business doesn't work out well, I question where the company can make money", given the mainstay steel business remains one of low profitability, he said.

This latest scandal threatens to further undermine confidence in the quality of Japanese manufacturing.

A rocket it launched yesterday reportedly had materials sourced from Kobe Steel.

Toyo Tire & Rubber officials were referred to prosecutors in March following the company's 2015 admission that it had falsified data on rubber for earthquake-proofing buildings.

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