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Airbus says has not found suppliers affected by Kobe scandal

13 October 2017

Japan Aeroforge is a venture controlled by Kobe Steel and Hitachi Metals.

"This incident of improper conduct came to light following self-inspections and emergency quality audits of the compliance status of contracts executed as to products shipped over the past year", Kobe Steel said in a news release. The official did not elaborate.

The steelmaker faces a range of legal risks, including compensation sought by clients or their customers, penalties for violating unfair competition laws for false representation, shareholder lawsuits for the fall in the company's stock price and class lawsuits from overseas customers seeking punitive damages, a lawyer, specialising in corporate laws and risk management, said.

He said he was not expecting to see recalls of cars or airplanes for now and none of the company's customers have canceled orders.

The bombshell admissions by Japan's third-largest steel maker sent its shares plummeting again, with the scale of the misconduct dealing a body blow to the nation's reputation as a high-quality manufacturing destination.

Central Japan Railway, which operates high speed trains between Tokyo and Osaka, found aluminum parts used in the truck - the part that connects the wheels to train cars - failed to meet company standards, said spokesman Atsuo Utano.

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The shares were up 0.9 percent by around 0424 GMT, compared with an 0.5 percent gain in the Nikkei 225.

In July a year ago, however, Kobe Steel said it had begun mass production of titanium forged parts for A350 landing gear.

Other Kobe materials affected include steel powder, aluminium flat-rolled products and castings, copper strips and tubes and forgings.

GM joins automakers including Toyota Motor Corp and as many as 200 other companies that have received parts sourced from Kobe Steel.

A growing number of vehicle makers including Toyota and General Motors are investigating whether aluminium with falsified and strength and durability data has been used in their cars, after supplier Kobe Steel admitted to tampering with its product standards.

Late on Wednesday it said it had found 70 cases of tampering with data on materials used in optical disks and liquid crystal displays at its Kobelco Research Institute Inc, which makes and tests products for the company. One bullet train operator has already said it will seek compensation from Kobe Steel. Conglomerate Toshiba Corp is still battling the fallout of a scandal over reporting inflated profits.

Airbus says has not found suppliers affected by Kobe scandal