Toyota declares aluminium from scandal hit Kobe is safe

Plane makers to car manufacturers rush to check deliveries after Japanese steel major admits falsifying data

FILE PHOTO: Kobe Steel President and CEO Hiroya Kawasaki (C) and the company officials bow during a news conference in Tokyo, Japan October 13, 2017. REUTERS/Kim Kyung-Hoon/File Photo
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Toyota Motor cleared aluminium parts supplied by Kobe Steel of safety concerns, giving the embattled steel maker a respite as companies around the world rush to check the safety of their products following revelations of data falsification.

Shares of Kobe Steel rose, erasing earlier losses, after Toyota said aluminium plates received directly from the steel maker and from other suppliers met both internal and statutory standards. The plates were used in parts such as hoods and rear hatches, it said. Honda  and Mazda also gave an all-clear on aluminium parts supplied by Kobe.

Japan’s biggest car maker is broadening its investigation beyond aluminium, to include copper tubes, steel wires and steel powder used in its vehicles, the company said.

American manufacturers, including Ford and General Motors and the nation’s biggest plane maker, Boeing, are among some 500 companies worldwide affected by a supply chain tainted by admissions that Kobe falsified certifications on the strength and durability of metals going back to at least 2007.

A Kobe Steel executive said late Wednesday the company expects to issue a new safety inspection report as early as next week.

The executive, who asked not to be named because the information isn’t public, also said there haven’t been any fresh reports of data irregularities.


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On Friday, the company added nine items to its list of affected products, making 16, and said it was still checking the safety of five of them with customers. It had already deemed the other four safe. The units implicated in the crisis make the steel, copper, aluminum and other materials that account for over half the company’s revenue.

The US department of justice has asked for documents related to the faked data, but the agency hasn’t set a timeline for Kobe’s submission and didn’t identify specific products in its request, the executive said. The Japanese company has said it will cooperate fully with US authorities.

Later on Thursday, Japan’s transport ministry will hold a meeting with department officials responsible for aircraft, automobiles, trains, marine vessels and construction, according to officials from the ministry who asked not to be identified because the meeting isn’t public.

Japan’s third-biggest steel maker reports second-quarter results on October 30, and has said it can’t yet quantify the impact of the scandal on its earnings. Shares are down almost 40 per cent in Tokyo since the crisis began at the start of last week, although there haven’t been any reports of product recalls or specific safety concerns raised by its customers. The stock gained 3.8 per cent to ¥858 as of 12:58pm in Tokyo.

Europe’s air-safety regulator has recommended that companies using material from Kobe review their supply chains and - if alternative suppliers are available - suspend purchases from the Japanese company. The aircraft engine maker Rolls-Royce Holdings is among the latest firms to say it’s studying suppliers to assess its exposure to Kobe products.

Japan’s ministry of economy, trade and industry has also asked the company for a report on the scandal, including causes and remedies.

In other developments, two Japanese brokerages, Imamura Securities and Hokuhoku Tokai Tokyo Securities, said they cancelled sales of structured notes linked to Kobe Steel in light of the risks related the company.