Kobe Steel Ltd.

SPECIAL REPORT: — by Heat Treat Today Managing Editor, Laura Miller

Automakers and aerospace manufacturers worldwide are reacting to recent reports that employees at Kobe Steel, Ltd, continued to fabricate data regarding strength and durability of metals during and after an internal investigation, that management failed to notice the deception, and that, as a result, the company had violated statutory standards and shipped substandard products without customer knowledge or consent. This is contrary to previous Kobe assertions that all products affected by the scope of the investigation that had been sold had met safety and other standards.

The results of the original probe announced on October 8 were that data fabrication had only involved contract specifications agreed to with aluminum and copper customers, giving the impression that it was just a narrow scope of Kobe’s orders that were affected by the tampering. On Friday, October 20, however, Kobe Steel Group officials reported that industry standards had been violated and a new investigation had begun into the falsification of data at a facility that cuts and processes steel plate, and a plant in western Japan has been red-flagged for “obstructing company’s voluntary inspection” by concealing data.

“There has been also some impact on our business as we have lost credibility,” Kobe Steel executive vice president Naoto Umehara said, noting that customers have been canceling orders. “But we can’t quantify the impact at the moment.”

No safety problems have been reported by any manufacturers using Kobe products.

A statement at the company’s website reads:

We are extremely sorry for our improper conduct. At this time, we sincerely and deeply apologize for the enormous amount of worry and trouble we have caused many of you in respect to the improper conduct concerning a portion of our products made by our company and group companies.

In September, U.S. Steel and Kobe announced plans to build a new continuous galvanizing line for advanced high-strength steels for the automotive industry at the PRO-TEC Coating Co. subsidiary in Leipsic, Ohio. “U.S. Steel remains committed to our new Advanced High Strength Steel CGL and bringing solutions to our customers,” U.S. Steel spokeswoman Meghan Cox said Friday. It is unknown whether the PRO-TEC project will still involve Kobe Steel products.

For a list of companies that have received falsely certified parts or are checking whether they have received them, read “Factbox: Kobe Steel’s data fabrication leaves manufacturers scrambling“.

Sources: The National, Reuters, The Japan Times, Nikkei Asian Review, NWI Times, Kobe Steel, Ltd