Kobe Steel scandal hits car-makers

Japan’s Kobe Steel has admitted that about 500 customers are affected by its worsening falsified data scandal – more than double the number first estimated – including some of the world’s top car-makers.

According to Japan’s daily Nikkei business paper, more than 30 foreign customers were affected, including Toyota, Nissan, Honda, GM, Tesla, Daimler and PSA Peugeot-Citroen, plus airliner manufacturers Boeing and Airbus.

The news came on Friday as Kobe Steel stocks continued to fall -- down more than 40 per cent or $US1.8b since early this week, when it admitted to falsifying strength and quality data for a range of products.

Kobe Steel had previously admitted to falsifying quality data for products sold to around 200 clients, and says the practice may have started a decade ago.

“Combined with previously announced clients, it will total about 500 firms,” said a senior executive from Japan's third-largest steel-maker, Yoshihiko Katsukawa.

Kobe Steel president Hiroya Kawasaki told reporters the company had uncovered nine more types of products whose inspections had been faked or manipulated, including copper alloy pipes and moulds and steel wire rods used in vehicle tyres and engines.

The company said the latest problems were discovered in shipments of more than 11,000 tons of steel, copper, and aluminum products made by Kobe Steel and its affiliates in Japan, China, Malaysia and Thailand.

Kawasaki attempted to explain why the company had chosen not to disclose some of the cases that had been discovered much earlier and discussed at past board meetings, including steel powder, flat-rolled aluminum, castings, copper tubes and forged products.

"Right now, our top priority is to find out the cause and take preventive measures, and to determine if our inadequate products affected our customers," he said.

"I plan to put all my energy into that effort. I'm most troubled by the magnitude and the extent to which this problem has spread," Kawasaki said.

Kobe Steel says it does not expect any product recalls due to the misconduct, but the full extent of the scandal remains unknown since it has not identified which products are affected for which customers.

The 112-year-old company is a major supplier to many manufacturers, including car-makers, railways, aircraft builders, semiconductor factories and nuclear power plants.

Kobe Steel supplies half of the world’s wire rod and half of Japan’s aluminum car bonnets, and also produces components for the country’s iconic Shinkansen bullet trains.