News Worms
News Worms


Toyota and Honda affected by industrial scandal in Japan

Toyota and Honda affected by industrial scandal in Japan

Subaru also makes parts for the Boeing 777X next-generation large passenger jet, but says nothing so far has raised safety concerns.

Toyota, Nissan, Subaru, Mazda, Suzuki and Mitsubishi were also among auto companies potentially affected, as well as Kawasaki and Hitachi in other industrial uses.

Kobe has set up an investigation committee to address the issues, headed up by its Chairman, President and Chief Executive Officer Hiroya Kawasaki.

Doors and hoods are also affected at Nissan, a spokesman confirmed.

Smaller Japanese automaker Subaru said that it used Kobe Steel products not only for vehicles sold to retail customers but also in aircraft.

Aluminium castings, forgings and flat-rolled items, along with copper strips and tubes were among the products affected, the company said in a statement.

"The impact on financials is unclear, but could be substantial depending on request (s) for replacement/recall", Jefferies analyst Thanh Ha Pham said in a note. "There's a possibility that the company would have to shoulder the cost of a recall in addition to the cost for replacement".

Kobe said that at present there was no evidence that the "nonconforming" products would compromise safety.

Honda equally said it used the falsified material from Kobe Steel in vehicle doors and hoods while Mazda Motor Corp. confirmed it uses aluminum from the company. Some Kobe products were used in regional jets and rockets produced by Mitsubishi Heavy Industries. The rocket cleared all safety checks before launch, the company said.

The new Toyota Tundra TRD won't be impacted by the Kobe Steel scandal.

It said that inspection data on the products, including those on strength and duration of the materials, were rewritten by workers who were "under pressure" to meet a deadline when the actual data failed to meet customer specifications. Kobe Steel's aluminum and copper operations account for about 20 percent of total sales, according to data for the quarter ended June 30.

"Aluminium is a strategic business for Kobe Steel", said Irisawa at Tachibana Securities. "If the aluminum business doesn't work out well, I question where the company can make money", given the mainstay steel business remains one of low profitability, he said.

And this isn't the only scandal that's been coming out of Japan as of late. Hitachi Ltd., which used Kobe products in trains exported to the United Kingdom, said it's found no safety concerns.

Also, in February 2017, Takata pleaded guilty in the U.S.to one count of wire fraud for misleading automakers about the safety of its air bags.

Toyo Tire & Rubber officials were referred to prosecutors in March following the company's 2015 admission that it had falsified data on rubber for earthquake-proofing buildings.

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