Who would have thought it — a major Japanese corporation caught falsifying inspection and quality data?

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Japanese standards have come to be accepted as a byword for quality in the manufacturing industry — but it would seem in a world where even Germany’s premier automotive giants can cheat and deliberately mislead customers, so can the Japanese.

Who can you trust, consumers down the supply chain must be asking, if even Japanese and German manufacturers are prepared to lie and falsify quality assurance data?

The latest scandal to rock Japan’s manufacturing sector is an admission by the country’s third-largest steel producer, Kobe Steel, that for potentially up to 10 years they have been falsifying quality data.

As these goods have gone into aerospace, construction, automotive and transport applications, the only saving grace seems to be that checks so far suggest the material supplied has met the standards expected.

But as the investigation is in its early stages, there is plenty of scope for worse scenarios to unfold.

Some 20,000 tons of metals delivered to about 200 customers are said to have been affected this year, with not just steel but also aluminum and copper goods involved. The Financial Times reported products affected included: 19,300 tons of aluminum plate and extrusions; 2,200 tons of copper strip and pipe; and 19,400 cast and forged aluminum parts for customers such as Boeing, Toyota, Honda, Mazda, Mitsubishi Heavy Industries – maker of regional jets and the H-2A satellite launch vehicles.

Boeing issued a statement saying, “Nothing in our review to date leads us to conclude that this issue presents a safety concern, and we will continue to work diligently with our suppliers to complete our investigation.” That, however, hasn’t saved the share price from taking a pummeling.

Kobe shares are down over 40% this week. The cost of protecting the company’s bonds has quadrupled over the same period.

Source Financial Times

The company is desperately trying to get a handle on how widely and for how long the falsification of paperwork has been going on, and whether it also extends to Kobelco, the group’s maker of construction equipment.

Unfortunately for Japan Inc, Kobe is not alone in its misdemeanors.

Two weeks ago, carmaker Nissan recalled nearly 1.2 milliom vehicles that had been certified by unauthorized technicians. Last year, Mitsubishi Motors admitted to having overstated mileage figures for eight vehicles in its range.

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Is it too much to expect major corporations to tell the truth? They certainly trade on their brand image as reliable and high-quality manufacturers.

Such failures make something of a mockery of Western firms’ often disparaging comments about the quality of emerging-market competitors when their own systems and procedures appear little better.

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This morning in metals news, the world’s top copper producer expects a moderate rise in the metal’s price going forward, the Aluminum Association announces new leadership and Kobe Steel continues to reel from its data falsification scandal.

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Copper on the Rise

The price of copper is set to experience moderate increases, according to the mining minister of Chile, Reuters reported.

Aurora Williams, the mining minister of Chile (the world’s top copper producer), said Wednesday that there will be moderate increases in the metal’s price, but not enough to push it above $3/pound for the year.

According to the Reuters report, copper exports reached $3.18 billion in September, their highest level in nearly three years.

Changing of the Guard

The Aluminum Association announced new leadership on Wednesday.

Michelle O’Neill, senior vice president of senior vice president of global government affairs and sustainability at Alcoa, was elected as Aluminum Association Chair, becoming the first woman in the association’s 84-year history to hold the position. She replaced Garney Scott, president and CEO of Scepter, Inc., following a two-year term.

Kobe Steel Data Scandal Continues

It’s difficult to quantify lost trust, but it’s a problem Kobe Steel, Japan’s third-biggest steelmaker, is dealing with now on the heels of a data falsification scandal.

Now, the chief executive of the company is admitting the scandal is a serious hit on the company’s image, one that leaves it with “zero credibility,” The Guardian reported.

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According to The Guardian’s report, General Motors is the latest manufacturer to check whether its cars contain falsely certified parts or components sourced from Kobe Steel.