Product Quality Problems Look Far from Over One Year On

October 9, 2018

Tokyo- Product quality problems in the Japanese manufacturing sector still look far from over one year after Kobe Steel Ltd. disclosed its quality data fraud.

On Oct. 8 last year, Kobe Steel made public its product inspection fraud, the first case in the series of product quality scandals that has tarnished the image of Japanese manufacturers.

The steelmaker said it had shipped aluminum and cooper products that did not meet specification requirements, such as product strength, promised to clients, by falsifying product inspection data.

Similar scandals emerged at other famous materials makers Mitsubishi Materials Corp. and Toray Industries Inc. the following month.

Affected products of the three companies were used in a wide range of products manufactured by other makers, even including automobiles, Shinkansen bullet train cars and aircraft.

"Back then, I didn't understand why people were making a fuss" about the quality irregularities, said an employee of a major basic materials producer.

Insufficient responses from companies added fuel to the public outcry over the scandals. Many materials makers did not fully recognize the social trend of attaching importance to legal compliance as they do not deal directly with consumers, industry watchers said.

In December last year, the Japan Business Federation (Keidanren), the country's top business group, requested its member companies and organizations to conduct internal probes and report wrongdoing if there is any.

Product quality irregularities have been reported by one or more Keidanren members every month since February this year.

This year's total has exceeded 20 companies. Among them were Tohoku Electric Power Co., Asahi Glass Co., now called AGC Inc., and Nippon Yusen K.K., as well as big electronics, vehicle and machinery makers such as Mitsubishi Electric Corp., Hitachi Ltd., Nissan Motor Co. and Kubota Corp..

Many companies have released reports on the results of probes into their scandals. Cited often as causes of their irregularities were strong pressure to meet product delivery deadlines and insufficient communication between corporate managers and factory staff.

"Managers bear responsibility because they have the power to collect information and change the situation," said lawyer Shin Ushijima, an expert on legal compliance issues.

Over its scandal, Kobe Steel has been dragged into class-action litigation in the United States. The company is also under investigation by the U.S. Justice Department.

The company is likely to face large amounts of damages and fines. The price of its scandal has not been fixed yet. Jiji Press