business

Kobe Steel reports wider fudging of metals data since 2011

60 Comments
By Elaine Kurtenbach

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The Japanese government urged steelmaker Kobe Steel on Wednesday to clarify

You can not FORCE them?

13 ( +14 / -1 )

Everyone was drunk at the time and can't remember.

12 ( +17 / -5 )

I believed for long that Japanese are honest people. But I have change my idea.

17 ( +21 / -4 )

The Japanese government urged steelmaker Kobe Steel on Wednesday to clarify

You can not FORCE them?

Exactly. Just like the govt urges companies to raise wages.

7 ( +8 / -1 )

Many of these big corporation and their old governance still live with their old minds. They have hard times to face now a stiff competition and search by bad ways, if they can't find a proper one to reduce costs to keep margins and eventually dividends. Same with Toshiba, Fujitsu... And I don't even talk about the gas emission scandal including the major foreign carmakers. I think only Toyota has not been into that scandal up to now.

All the guys behind data falsification or accounting "errors should be severely condemned.

8 ( +9 / -1 )

Shake the tree and they all fall out.

9 ( +10 / -1 )

Excellent comments from all of the above. And the picture just says it all. You can be as deceitful as you like. Just learn to bow real low and apologize when you are caught. Standard operating procedure in Japan.

14 ( +17 / -3 )

Another scandal, another Abe govt. business " urge" .

Yeah, because all the other " urges" to J- Inc. worked so damn well, didn't they.

Are these guys merely incompetent wimps unable to come up with anything else than an urge or are they just sticking their corrupt finger to public.

Guess it's both , ain't it.

4 ( +7 / -3 )

Well, if the Japanese government is unable to deal with its own companies maybe the US can help out:

"In the past six years, 64 employees from 39 Japanese auto parts markers were indicted for suspected violations of U.S. antitrust laws, and many of them remain behind bars across the United States, according to a Sentaku investigation."

"The U.S. Department of Justice indicted the Japanese employees for law violations stemming not from their conduct in the United States, but for actions in Japan that, it deemed, infringed on the principle of free competition, in what is known as an extraterritorial application of the law."

https://sentaku-en.com/articles/2017/03/employees-of-japanese-auto-parts-makers-behind-bars-in-us.html

This seemingly endless criminal activity by Japanese companies is endangering the lives of milions around the world. When is it ever going to stop? Why can't the Japanese government do anything?

9 ( +11 / -2 )

The company said it has set up a committee headed by its president to investigate quality issues and hired an outside law firm to conduct a probe into the misconduct.

Aah yes, the famous J- Inc " internal investigation" - we can all guess what their findings will be...there is a problem but we can,t find anyone responsible for it, nobody made any decisions, it's a company culture problem but nobody will be held to an account re. such... A few deep bows for the camera,...kokoro kara moushiwake gozaimasen, ...will take steps to improve quality control and ensure this doesn't happen again...blah, blah blah...

And if this starts affecting the election mood and govt decides to give us a little heat so as to app are tough to the voting public we,ll just get one of our way past retirement dinosaurs to take a lovely golden parachute and quietly sail away into another amakudari " advisor" position somewhere.

Sincerely, Kobe Steel

0 ( +0 / -0 )

..the picture just says it all. You can be as deceitful as you like. Just learn to bow real low and apologize when you are caught. Standard operating procedure in Japan.

That's exactly what I thought on seeing the photo. I think we've lived here too long haha.

5 ( +7 / -2 )

This seems almost endemic with J companies.

And of course, as usual, no mention of any idea of prosecution for fraud.

Perish the thought!

6 ( +8 / -2 )

Dango Bango: "You can not FORCE them?"

It's the Japanese government we're talking about. They're too busy forcing people to pay more taxes and premiums and follow laws the majority don't want to enforce current laws with regards to companies. They can literally get away with murder, with the MAXIMUM punishment being a 500,000 yen fine or something. Guaranteed after these guys bow and promise to make things better, nothing will change, yet again, except that the companies might seek protections against damages caused to their reputation and sales due to corner cutting.

9 ( +11 / -2 )

I believed for long that Japanese are honest people. But I have change my idea.

All of them? How do you reconcile living here with that in mind?

0 ( +3 / -3 )

This is absolutely, completely, 100%...regrettable.

14 ( +15 / -1 )

The widespread falsification of data is "inappropriate"? That's an understatement. Isn't "criminal" a better word?

11 ( +12 / -1 )

Well, this is what you get when you let industries regulate themselves. I'd be surprised if other steel refiners were not also falsifying their quality data. This makes a mockery of the so called "standards" that these businesses supposedly adhere to, but also highlights that there really isn't much any regulator could do about this anyway..

5 ( +5 / -0 )

Japanese bureaucrats may be involved.  Their mission seems to hamper Japan's economy, which resulted Japan's GDP growth the lowest among all the countries in the world for the last two decades.

-2 ( +1 / -3 )

hired an outside law firm to conduct a probe into the misconduct

With strict instructions to go after the little guys involved. Same old same old. The nod to fudge the data or the pressure to do so came directly from the top with no doubt plausible deniability as a safety parachute! Sure there may be a few resignations but they will come with wonderful golden hand shakes for taking one for the team. Then back to business as usual and a better plan not to get caught.

4 ( +4 / -0 )

Those guys bowed 90 degrees, so we cool now?

9 ( +11 / -2 )

They should be imprisoned for the damage they are doing to Japan's image overseas.

The problem of lack of corporate governance in Japan also needs to be sorted out once and for all.

5 ( +6 / -1 )

Kobe steel falsifies its steel data. Asahi-kasei fabricates its concrete piles data. Fish sellers fabricate their catch data. JapanToday fabricates its user content data.

It's all the same root problem: cowardly, incompetent management who don't know how to solve their own institutional policy failures, so they conceal their mistakes instead of facing them.

10 ( +11 / -1 )

I find it interesting that this news comes on a day when the Nikkei index closed at a 20 year high (I guess Kobe Steel has tanked though).

Fancy buying shares in scandalous Japanese companies? It's not for me.

3 ( +4 / -1 )

PerformingMonkey: "The problem of lack of corporate governance in Japan also needs to be sorted out once and for all."

Won't happen because the people in charge of doing any sorting are the ones creating the problems and with vested interests, and when such jobs in these companies might be retirement positions for current politicians they daren't punish people at the top.

And here's the thing -- one of the reasons they don't want a big deal made of this, or a REAL investigations is because of the exact kind of scandal that's unfolding due to the unexpected overseas media attention in yet ANOTHER J-corp scandal. This is JUST on the heels of Nissan's lies, Toshiba's, Toyota's and all the other recalls because of Takata, and of course Olympus as well. With Mitsubishi Heavy rumored to be using these falsified products that compromise safety in its products, INCLUDING the thrice-delayed Japanese original jet, there is a LOT at stake. They want it quiet, they don't want to have to start the jets again and say "It's okay -- no problems!" And then we'll have a problem like with the Dreamliner batteries; very serious safety threats. But they want to be able to say "it's done" first.

6 ( +6 / -0 )

"Made in Japan" is only as good as its politicians and companies that produce the products, which means it's not even close to being worth dirt these days.

8 ( +8 / -0 )

...where it stops, nobody knows.

3 ( +3 / -0 )

They should be imprisoned for the damage they are doing to Japan's image overseas.

What damage? Japan has always invested most of its time and energies into crafting a false reality for others to see. The world laps it up and still thinks Japan is about samurai and cute things, and with a high sense of morals.

Even the locals drink the kool-aid refuse to see the elephant in the room.

Adapt or wither doesn't mean to become better at corruption (even when it is government endorsed). Change your ways, Japan!

3 ( +6 / -3 )

katsu78: It's all the same root problem: cowardly, incompetent management who don't know how to solve their own institutional policy failures, so they conceal their mistakes instead of facing them.

I disagree with that. In my opinion (based on the few Japanese companies I've worked for), a large part of these problems are intimately connected to workers who decide that it's better to falsify data rather than contradict their superiors, which is a cultural issue. Power-hungry bosses feel invincible (because no one ever contradicts them), so they set unreasonable and unrealistic targets for the staff. The staff feels powerless to argue against or negotiate with those targets, so they put their heads down, work for 160 hours a week, and when they still fall short, they feel unable to admit to it. Saying "That target was unreachable, despite our best efforts" is still contradicting their superior. So, they fudge the data. The superiors may or may not be aware of this data fudging, but because they don't want to look bad, they either accept it blindly, without close examination, or choose to look the other way. They then pass that data up to the executives, who follow suit and announce how great they are to the stockholders, media, general public, and...yes...back to their own workers. It's about saving face, it's about institutional hierarchy, and it's about a system/culture that prevents an honest dialogue about the realities of business.

6 ( +6 / -0 )

There are two types of Japanese companies, the ones caught lying about something and the ones haven't. If you think Takata and this are isolated cases ... well, good luck! I told a co-worker before about how he was doing his work incorrectly, I won't be able to forget the flabbergasted faces he and the others put up. There's little accountability here, you can't question your co-workers competency, if you do, you're "dishonoring" them.

8 ( +9 / -1 )

Japanese corporate integrity at its finest.

3 ( +4 / -1 )

Another recall for Subaru? How will anyone know they are in danger by driving the vehicle. Is Toyota and Honda next? Do their products contain Kobe steel?

1 ( +1 / -0 )

The Original WingToday  01:32 pm JST

katsu78: It's all the same root problem: cowardly, incompetent management who don't know how to solve their own institutional policy failures, so they conceal their mistakes instead of facing them.

I disagree with that. [A series of cogent points snipped for brevity]

I don't disagree with anything you say, I just don't see how what you've said contradicts my point.

0 ( +0 / -0 )

Just keep on apologizing!! You've basically ruined foreign competition by falsifying your standards!

Companies like Norwegian Hydro and Tata steel has lost ground thanks to dishonesty within Kobe Steel manufactury! The World Trade Organization should be called in! This is just very unfair in terms of international competetivness.

4 ( +4 / -0 )

I'm pretty sure that high officials in the company were well aware of the issue, but feared to "lose their faces" and kept it under wraps. This is the same symptom that largely caused the Fukushima disaster.

6 ( +6 / -0 )

Zero Japanese corporate governance.

2 ( +3 / -1 )

whistling in the dark for six years?!? Holy smokes. This is not just one company's problem. They're a provider to other companies, so this also means that any company that received product didn't do any quality control and had zero testing as well. Take scandal, and multiply it by every company customer in the entire country. Corporate governance simply doesn't exist.

4 ( +4 / -0 )

The world laps it up and still thinks Japan is about samurai and cute things, and with a high sense of morals.

I'd give a bit more credit to "the world" than that, tbf.

Even the locals drink the kool-aid refuse to see the elephant in the room.

Which locals? All of them?

Adapt or wither doesn't mean to become better at corruption (even when it is government endorsed). Change your ways, Japan!

See, I'm always at odds with this brusque kind of statement. Sure, as a gaijin I can wish some things were different and I can certainly discuss them (refugees, foreign bases on Japanese soil etc) but demanding Japan does things the "proper" way?

I'd at least say "please consider"...

1 ( +1 / -0 )

Scandal after scandal after scandal.... Brand Japan, just like anywhere else, is not special or unique: It’s human.

Toyota, Nissan, Panasonic, Tacked, Novartis, TEPCO, Takata, Shinko Wire, and the list goes on and on and on....

6 ( +7 / -1 )

Does any one have a spare Tanto handy? I think that it should be given to the bosses of Kobe steel, its inexcusable, unforgivable for what they have done, they possibly have put a lot of lives at risk.

2 ( +2 / -0 )

An old oyaji I often meet up with whose English is quite good and likes to chat me up couldn't contain his glee a couple of years ago at the Volkswagen emissions scandal, and the man is an absolute Japanese car fanatic, insisting the Lexus is greater than any car ever built in the world, etc. Still talked about it, albeit with less enthusiasm, when all the scandals here started breaking out (part of his initial enthusiasm about VW was because of anger he still felt about Takata being blamed for its own faults), saying VW was worse. Saw him just after lunch today while walking to the local supermarket on break, and boy did he NOT want to talk about cars.

1 ( +2 / -1 )

So, should we start a list of Japanese companies who have been caught falsifying data and test results in the last few years? The list is pretty extensive.

Mitsubishi financial data

Takata airbags

Suzuki fuel mileage

TEPCO - Oh, TEPCO!

At least half a dozen construction companies with everything from tunnels to apartment blocks

NISSAN popped up the other day

That's just a few off the top of my head. Feel free to add more.

-1 ( +3 / -4 )

There are certain questions not yet being asked as far as I know, that surely need clarification. One that I personally would be interested in is Kobe Steel's involvement in the nuclear industry. I see on their website that they offer to dispose of old dismantled nuclear power plants, etc. A friend who is a worker at a different Japanese steel company was telling me how every part that they make for nuclear plants in Japan has to be made to a much higher specification, and has to be tested and certified. Is all of this robust?

5 ( +5 / -0 )

I find it interesting that this news comes on a day when the Nikkei index closed at a 20 year high

Also when Japan succeeded a satellite rocket launch. I don't think it is coincident. As Brzezinski said "Japan shouldn't be a regional power."

-5 ( +0 / -5 )

@Disullional: UKUK93 already did. @nandaka: That’s a good question, they make... (Ready to be scared?):

Nuclear Spent Fuel Casks

These casks are used for shipping and storing spent nuclear fuel from nuclear power plants. Kobe Steel was the first Japanese manufacturer, in 1981, to begin manufacturing large-sized forged casks. Kobe Steel boasts the world’s top shipping record for these casks, supplying over 250 casks in Japan and overseas.

6 ( +6 / -0 )

The guy in the picture is like, "This wasn't supposed to come out until after I retired..."

3 ( +4 / -1 )

This is just rediculous. Data fraud for SIX years. This is the Olympus scandal all over again. Unbelievable.

3 ( +4 / -1 )

@Katsu78,

I guess the point you mentioned that I disagreed with was "cowardly." I don't see it as being cowardly, when looked at from the cultural point that I suggested. If the same thing were to happen at a company in my home country, then sure, I think we could call someone who'd rather fudge the books than contradict his boss a coward. But that's because people from my country see "standing up to authority figures" as a feasible option, something that happens from time to time. So, if it's plausible, and the situation dictates that you SHOULD, then sure...let's call him a coward if he doesn't. But in Japan, that move just isn't seen as plausible. It's a no-go zone. And if it's not a choice, then how can you be a coward for not choosing to do it?

2 ( +2 / -0 )

Now lets all watch anyone and everyone involved throw their arms in the air and yell "shoganai!"

2 ( +3 / -1 )

it's about institutional hierarchy, and it's about a system/culture that prevents an honest dialogue about the realities of business.

Great post, Original Wing - I think you have identified the true problem in the Japanese psyche that leads to these issues.

2 ( +3 / -1 )

tbh, the fact that it happens doesnt surprise me, where theres a will theres a way. But if the punishment continues to be what it tends to be it will only continue, as i would imagine there would be alot more murders if the punishment is only a 50 dollar fine.

1 ( +2 / -1 )

The guy in the picture is like, "This wasn't supposed to come out until after I retired..."

Japanese people are not like that people.  They have pride in their professions.

-7 ( +2 / -9 )

Nuclear power restarts need to be halted immediately so that any "inspections" can be inspected for actual inspection.

3 ( +3 / -0 )

*These casks are used for shipping and storing spent nuclear fuel from nuclear power plants. Kobe Steel was the first Japanese manufacturer, in 1981, to begin manufacturing large-sized forged casks.*

"Forged" is right.

3 ( +3 / -0 )

Japanese people are not like that people. They have pride in their professions.

Really, Tina? Tell me, were the people running Takata airbags and covering up the data proud of their profession? What about the Toshiba folks who fudged the numbers? Or the Olympus people who did the same thing?

Were the Mitsubishi engineers and designers and executives who lied their butts off for years doing it for pride in their profession?

You can trot out all the jingoistic junk you want, but the fact is that coverups and lies seem to be a more and more frequent occurence in 'honest' J-Inc.

3 ( +4 / -1 )

It's a cultural thing... within the culture of business.

Japan companies are no better than non-Japanese companies. That's the bubble that disappoints Japanese when it pops.

Some of the usual suspects are trying to paint all of Japanese culture as evil. No better and no worse.

2 ( +4 / -2 )

@Schopenhauer:

Some food for thought: this fraud first came to light from their own employees. And, just because shenanigans don't get exposed, doesn't mean that they're not occurring.

Honesty is not tied to any race/nationality, but to each individual.

3 ( +3 / -0 )

It is not fudging data, it is faking inspection data.

2 ( +2 / -0 )

Kobe Steel does not care if the planes, cars, and other appliances come apart in mid-air, on the express way, or causes fire in your homes and offices. The company is concerned with the financial bottom line only.  They don't CARE about your safety.  Bonuses to management is a concern, but safety to consumers.... 

1 ( +2 / -1 )

This is going over like a lead balloon. Resign already. Japan Inc needs some thorough reform in some areas.

0 ( +0 / -0 )

So far as has been reported, Kobe steel has reported this themselves rather than being uncovered by product failures.

0 ( +0 / -0 )

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