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October 20, 2017

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Kobe Steel parts safe, say Japan automakers

FOUR Japanese automakers yesterday said they found no safety issues with aluminum parts supplied by Kobe Steel Ltd, allaying some concerns that falsified quality data on products from the steelmaker had compromised their vehicles.

Kobe Steel shares surged after the car makers’ statements, but the steelmaker still has to contend with a US Justice Department probe, while checks continue at hundreds of companies involved in complex supply chains spanning the globe.

Japan’s third-biggest steelmaker admitted earlier this month it falsified specifications on the strength and durability of aluminum, copper and steel products, along with materials for optical disks. The falsifications stretch back for more than 10 years, a senior executive told Reuters this week.

Since then, global automakers, aircraft companies and other manufacturers have scrambled to identify potential hazards in their products.

Toyota Motor Corp, Honda Motor Co, Nissan Motor Co and Mazda Motor Co said that hoods and other exterior parts used in their cars which were made from aluminum directly supplied by Kobe Steel were safe.

Kobe Steel shares ended the day nearly 7 percent higher but are still down by more than a third since it announced the data falsification.

Automakers are still making checks on other parts, including those that they received through their parts suppliers.

“We confirmed that the materials satisfy applicable statutory standards, and our own internal standard, for key safety and durability requirements for vehicles,” Toyota said in a statement.

Toyota, one of the world’s largest automakers, identified aluminum plates supplied by Kobe Steel for the hoods and rear hatches of Toyota and Lexus brand vehicles. Though outside the automaker’s specifications, they were still safe to use.

While Subaru and other carmakers said they were still investigating the issue, the announcements by Toyota, Honda, Nissan and Mazda suggest that Kobe Steel’s cheating scandal may have a limited impact on product safety.

Nonetheless, the company’s fate hangs in the balance while checks are being carried out. It must report to Japan’s industry ministry by around the end of next week on any safety concerns and provide a more extensive account of the problems a fortnight later.

Industry leaders have reached a consensus that Kobe Steel is in a “serious situation,” a senior Japanese manufacturing executive said.

“For a manufacturer, quality control is the most important thing and they were cheating for many years. This was a shock to their customers, who can no longer trust Kobe Steel,” the executive, speaking on condition of anonymity, said.

This was the view of Japanese industry leaders, even though no safety issues have so far been identified, the executive said.


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