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Kobe Steel scandal latest to tarnish 'Made-in-Japan' brand

33 Comments
By Sam Nussey

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That reputation has eroded over recent years.

It started eroding quite a while before these "recent years" assumption here. The zaibatsu covered their arses, and the arses of those around them to help increase the image of "quality".

There have been numerous issues related to quality control, and far too many were swept under the table in the name of promoting Japan Inc.

The "reputation" has been going down since the bubble burst, as companies, in an effort to survive, started covering up problems, and cutting corners, to keep profits going up, at the cost of safety and quality.

The biggest problem all these kaicho's and shacho's face is having to stand up and apologize for their failure to keep up the standard, and bigger still, is being caught!

7 ( +10 / -3 )

Kobe Steel under pressure from much cheaper foreign competitors embarked on ways to improve quality in order to make better quality products-a not inconsiderable task. Meanwhile, in the UK steel plants are closing down

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Eroded, collapsing might be more apt. The Oji sans just can't change their ways enforcing an outdated business model that is no longer relevant. Then act suprised when they are caught out! Their time is over, retire for everyone's sake. Good Job, get out. There is so much talent just waiting for the chance. Give them that chance.

8 ( +9 / -1 )

And, there's an article today about a Japanese bank giving out dodgy loans. They just can't help themselves. Even Abe is linked to unscrupulous behaviour. However, this article is wrong because this activity started at the end of the bubble over two decades ago. As soon as the money tree started to get bare all unscrupulous rip-offs started.

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"Made-in-Japan" became a byword for industrial quality and reliability.

That reputation has eroded over recent years.

Made in Japan products are still popular and regard as high quality products in the world, even thought some Companies have failed to follow the compliance rule. Such as problem is not just Japanese Companies and the Companies in other countries have too. The Kobe steel scandal may not need to recall products, but the Government must punish Kobe Steel and need to offer compensation to its clients.

-4 ( +6 / -10 )

Made in Japan products are still popular and regard as high quality products in the world,

Right, like Japanese diapers, made in China, but sold in Japan, or Japanese cars, made in the USA and sold there too!

Too many Japanese products that have the "label" of being quality are made somewhere else and sold here as well!

4 ( +7 / -3 )

I don't know if this is the straw that will break this camel's back but sure the camel has been hanging rather precariously low for the last decade or so. Still the Japanese economy is staying alive, sort of, though out all these problems, resilient is the best word here.

I don't think these can go on much longer.

We saw the national consumer go from "The only product I can trust is Made in Japan" to "shioganai, I am still too afraid to buy imports, even if it is cheaper, more advanced and has a better track record on safety than the domestic similar".

I said this before but as long as the domestic consumer still buy J-corp no matter what, we will see these problems again and again. Make these huge corporations fight for our money like they did before, make sure we only spend our money on the very best and innovative. Only then we might see some respect from these huge and outdated companies that have been holding Japan back.

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improve corporate governance

Improve? It is zero at the moment.

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Even if you want to buy "good" products, you don't have enough market information to make an informed choice. "Made in Japan" is just a label. It isn't enforced surprise surprise and could mean anything except exactly what the words are supposed to mean

3 ( +4 / -1 )

It could be argued that in a mature economy like Japan that knowledge based business should be a focus. However, will market forces be allowed to prevail? Where wages in other Asian countries are only a fraction of those in Japan and economies of scale in production and quality already optimized then it is only a matter of time before Kobe Steel is forced to give up....

4 ( +4 / -0 )

And your Japanese stock market is at 20 year highs.

I wonder if it would be were it not for the BOJ buying up loads.

Definitely not for me.

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Companies must do more to develop a culture in which workers are able to raise concerns and say "no" to their bosses

You must be joking. In Japan? Dream on. So many of these scandals are caused by management setting totally unrealistic targets; when the target can't be reached the fraud, fakery and deception begins. Cheap Chinese steel is destroying steel industries around the world. If Japan wants to compete it has to do it with high-end products. These endless scandals, most of which go completely unpunished in Japan, are a disaster for the country's image.

this article is wrong because this activity started at the end of the bubble over two decades ago.

It started long before that. The collapse of the Bubble brought it to light.

in the UK steel plants are closing down

The destruction of the British steel industry was begun by Margaret Thatcher in 1979. What's left of it was owned by Tata, an Indian company, until last year. Successive Tory governments have managed to kill it, and replace it with nothing.

10 ( +11 / -1 )

How is the steel industry in the US and Canada doing? Oh yes, they have collapsed under the weight of cheap imports that do not have the kinds of rules and regulations that other countries must follow. Where are cars being built these days, that's right Mexico, a country famous for its environmental record! How about your shiny new Iphone 8 or 10? That's right made by FOXCONN where they chain workers to their work stations and have to put netting to prevent suicides.

Industrialized, regulated countries like Japan cannot compete with places like China and India, and Mexico. Companies here have tried, they have used the made in Japan sticker as one way, now we see that they have been cutting corners as another method to try and compete, but in the end, they will all fail.

Why was Trump so popular in the rust belt, he promised to bring back coal jobs, steel jobs and car manufacturing jobs. I doubt he will be able to do it, but that is what the people wanted. Of course to earn a living wage the cost of these things will increase greatly making things much more expensive than before, that is the disclaimer Trump didn't tell people.

Back to Japan, what are they to do? I don't like the idea of falsifying data as a method of competing, but I think they are at their wits end on how to compete with the rest of the world.

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Falsification of data or coverups in Japan is endemic. From falsification of data on building standards to scientific data, financial data again and again, the list is endless and not just recent: Mitsubishi Motors, Bridgestone tires, TEPCO, Seibu Railways, Kaneko Cosmetics, Olympus, Takata airbags, Novartis, Lixil, Toshiba, Mitsubishi Motors again… The Lockheed scandal in the 70’s, Recruit, NTT, Sagawa Kyubin, the HIV tainted blood scandal, in the 80’s, construction companies again and again. Add to that the regular and numerous political corruption scandals. The perception that this is recent and that Japan is or has been relatively corruption free is a myth.

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I very much doubt that these same products or any others that are made in other Asian countries including China, S.Korea, Taiwan etc at more competitive prices are of a better quality and I very much doubt they are compliant either. It is just as easy, if not easier to fudge data, produce false rest reports etc. Indeed the investigation of such by independents is even less likely to come up with anything and even if they did less than zero would come out about it. China, for example, completely controls its media and press. Do you think for a second they would allow this type of news to break risking their economic bubble which has already started to leak profusely. Give me something "made in Japan" any day of the week over the same thing produced outside. The Japanese do have true sense of national pride and that ultimately trickles down into their products regardless by the workers themselves. I worked for some time for a very large European auto maker specifically in the warranty data sector. It is, and was, well known that the engine reliability of the larger Japanese car makers was superior to anything coming out of Europe. The US carmakers weren't even discussed...lol.

-3 ( +4 / -7 )

Give me something "made in Japan" any day of the week over the same thing produced outside. 

Made in Japan = rubbish.

-6 ( +5 / -11 )

Give me something "made in Japan" any day of the week over the same thing produced outside.

Its too bad Panasonic and Pioneer got out of the TV business because they consistently produced the best Made-in-Japan videophile grade plasma large displays backed with rock solid reliability.

Right now the large display landscape is littered with cheap throwaway chinese and korean brands.

-3 ( +4 / -7 )

Give me something "made in Japan" any day of the week over the same thing produced outside. 

Really? Let me give a great example of a 'made in Japan' rip-off. I recently bought a brand new MIJ Fender Stratocaster for just under ¥70,000. The body and neck were very well finished. However, after lifting the pick guard I was shocked to find the electrics were exactly the same as you find in a Chinese strat that you can buy for less then ¥10,000. The same pick guard can be bought on Amazon with switch and pick ups for less than ¥2,000. It's just a blatant rip-off! These guitars are advertised as having vintage pick ups, but they are just cheap Chinese garbage!

Buyer beware! Japanese goods are made to look good, but what is under the hood is cheap rubbish!

2 ( +7 / -5 )

Made in China Fenders do not cost 10,000 yen. You are paying a chunk, at least 20,000 yen, for the Fender name alone. My brother has an MiC Modern Player Tele, which is a great guitar, really slim neck, but they go for around 50,000 yen in Japan. It sounds like Fender have ripped you off with a false specification, which won't be the fault of the Japanese manufacturer making guitars for the brand. They'll just be doing what they are told.

Anyway, getting back to the article, but all these stories reflect a sad decline in Japanese manufacturing. Like Alfie, I'd blame Japanese corporate culture setting unachievable quotas for workers and promoting yes men on seniority rather than talented individuals. The inability of talent to move between companies is also very problematic. Good workers end up having to go down with the sinking ship.

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There should be prosecutions, but there won't be. And then the next company the day after tomorrow will bow and apologize, and it'll be rinse and repeat, without rinsing.

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With Korea and China innovating at a far higher rate than Japan is currently, Japan needs to really re-think their approach.

The table may be turning as far as reputation for quality goes because while Japan refuses to confront its problems and change - China and Korea are steaming ahead and taking large chunks of market share, as well as creating new markets.

It's your choice, Japan...

1 ( +3 / -2 )

 "Made in Japan" is just a label. It isn't enforced surprise surprise and could mean anything except exactly what the words are supposed to mean

Quite so, many products here in Japan with the "Made In Japan" label are actually produced elsewhere and put together here to be eligible to use the "Made in Japan" label. Not to mention that there have been all too many occasions where foreign products were mislabeled as being made in Japan, because the consumer here is gullible enough to believe that anything with the label means the "quality" is superior.

5 ( +5 / -0 )

should hand over management of some of the big corporations to the people who run Daiso and Can-Do and the like… they've got their act together and seem to thrive on goods on which there can be minimal mark-up… couldn't do any worse anyway….

1 ( +1 / -0 )

The old men who run these companies are just too isolated from the real world. Driven to and from work in chauffeured cars; surrounded by yes-men, and the token yes-woman; they preside over divisions and departments, with no concept of their own employees or even their company products. They have reached the top of the greasy pole, and focus on maintaining relationships within their own groups, and of course the group banks who provide the auditors, and who really own the companies in a convoluted network of cross-holdings. Within these companies is a real culture of fear, a feudal hierarchy; don't rock the boat, put in your time, do as you're told, and we'll take care of you. Change or die...

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yubaru: “Not to mention that there have been all too many occasions where foreign products were mislabeled as being made in Japan, because the consumer here is gullible enough to believe that anything with the label means the "quality" is superior”

exactly! And there are many who think fish caught off the coast of Japan are more delicious for some reason, or an organic fruit or vegetable that’s seed was imported is more delicious here than the imported fruit grown with just as much care, etc. And yet, despite this and the myriad of scandals plaguing Japan, many still insist that “made in Japan” is and always has been (since Japan’s rise after WWII) superior in quality — and that is exactly why scandals like this keep popping up. People don’t question it or keep their companies at a certain standard; they just buy into the idea that the companies are doing everything they should and not cheating the “honor code”. Any honor code here died long ago. The corporations are no different from anywhere else save that, and this holds for every facet of society, while the honor code has died there is no system in place and no willingness to hold companies accountable for corruption. They are, instead, rewarded in a way because they can fob off blame (as can the public) and just do it again after a minor staff shuffle (at worst), still raking in massive profits.

3 ( +3 / -0 )

kohakuebisu - Made in China Fenders do not cost 10,000 yen. You are paying a chunk, at least 20,000 yen, for the Fender name alone. My brother has an MiC Modern Player Tele, which is a great guitar, really slim neck, but they go for around 50,000 yen in Japan. It sounds like Fender have ripped you off with a false specification, which won't be the fault of the Japanese manufacturer making guitars for the brand. They'll just be doing what they are told.

Hey! Read my post again! There are no ¥10,000 Fender guitars, but there are a number of brands like Selder, Photogenic, etc. that can be bought for under ¥10,000. They all have the same all-plastic switch and pick ups with magnets glued on the back. This is exactly what was in my 2016 MIJ Fender Stratocaster. Your brother has an MIJ modern player Tele, ask him to take the pick guard off and check the electrics. It will be the same all-plastic switch and pick ups with magnets glued on the back, which are cheap Chinese garbage! I'm sure it sounds great to you, but are you a professional musician or guitar builder? I'm both and they are just garbage! Also, a new MIJ modern player telecaster costs around ¥70-90,000, not ¥50,000, as you speculated. After a lot of research I discovered that, Fender Japan only started doing this from 2008-2010 when they started making the 'Japan Exclusive' models, which are full of cheap Chinese junk and sold at high-quality guitar prices. Prior to that they were using all-metal switches and elnico magnetic core pick ups. Furthermore, in 2010, a Japanese made Fender Stratocaster was around ¥40,000. Now, they are ¥70,000~ with cheap Chinese garbage electrics and, unsurprisingly, they didn't tell anybody about it!

0 ( +1 / -1 )

Guitar's are Shirley the least of problems Japan faces. From the dodgy PM the beauracracts who wield power, companies who dictate their own tax payments. It's a concofoney of disaster over seen buy grumpy old men who refuse to move aside for younger more motivated people.

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you want a good "made in japan" brand? step 1 is punish those who tarnish it (kobe steel), and lets face it, making sure people dont falsify documents is pretty basic in terms of a good brand.

take a good look at what japan inc will do for its brand.

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 Furthermore, in 2010, a Japanese made Fender Stratocaster was around ¥40,000. Now, they are ¥70,000~ with cheap Chinese garbage electrics and, unsurprisingly, they didn't tell anybody about it!

Fender ended its joint venture in Japan in March 2015 - apparently they didn't tell you about that either - which makes Fender itself directly responsible both for the retail price and the quality of its products here. If you have a problem with your "recently bought, brand new" guitar, they would be the people to take it up with.

1 ( +1 / -0 )

Japan spent literaly decades improving the quality of products in order to prove to the world that they had something worth buying, at cheaper cost and of better quality that everyone else. And they succeeded.

Now they are doing what America does: killing the golden goose for short term gain.

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With Korea and China innovating at a far higher rate than Japan is currently, Japan needs to really re-think their approach.

Unlike Japan, they still have nothing to offer than being cheap and while ~60% as good.

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I think it's likely that most customers have some kind spot inspections in place to monitor the material quality on their end too. For steel they would examine the surface measuring grain regularity and frequency of impurities. That wouldn't be the same as actually ripping steel to its breaking point to measure tensile strength, but would give an equivalent result with less accuracy. Third party steel inspection is an industry in itself.

Furthermore, I think it is most likely feedback from customer's own spot checks that pushed Kobe into this "correction", while Kobe was trying to cut costs. In other words the quality issue wasn't a surprise to customers, it's more like a desperate yelp from Kobe as nearly equivalent quality steel is becoming available "elsewhere" at a lower price.

In that case many customers will probably switch to the cheaper alternative. How that's going to work out in the long run depends upon the tensile strength of the walls in your glass house.

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Unlike Japan, they still have nothing to offer than being cheap and while ~60% as good.

Actually. It depends on the product. Some of them, Japan can't hold a candle to. Like I say, Japan really needs to re-think their approach (on many fronts, actually). But I fear that Japan is not capable of doing so. Meanwhile, they are quickly losing their place in Asia... and their reputation in the world.

Once again; It's your choice, Japan.

1 ( +1 / -0 )

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