Kobe Steel’s Admission of Falsified Inspection Data Creates Fear of Substandard Materials Used By Major Manufacturers

Kobe Steel, a major Japanese steel and metal manufacturer whose products are used throughout the world, admitted this month that employees had falsified data regarding the quality of aluminum, copper, and powdered steel sold through its supply chain. The announcement was not only a blow to one of the largest metal suppliers in the world, but also to the hundreds of companies that use their materials, including multinational automakers the likes of Ford, GM, and Toyota, and aircraft manufacturers such as Boeing and Mitsubishi Heavy Industries, among many others.

These major manufacturers, which source metal products from a variety of suppliers and producers, are now tasked with the daunting chore of determining if substandard materials may have been used in any of their own products – something that could severely compromise their integrity and the safety of consumers.

According to a statement released by Kobe Steel, employees at four of its factories had tampered with inspection certificates for copper and aluminum products between September 2016 and August 2017. The company reports those changes made products appear as though they met manufacturing specifications required by customers, including for factors such as tensile strength (which measures a material’s ability to bear a load without breaking) when they in fact did not. Roughly 4% of its output between September 2016 and August 2017 is believed to be affected.

Days later, the company also announced it was investigating potentially falsified data involving powered steel, which is commonly used in the production of gears. The powdered steel under investigation had been sold to one unnamed customer. The company additionally stated it would be investigating whether any other instances of data falsification occurred within the past 10 years.

Although no injuries, deaths, or safety incidents have been attributed to Kobe Steel, the recent announcements have created concern among manufacturers and consumers alike. This is especially true among major transportation manufacturers and carmakers that are trying to assess safety risks and their exposure. Rolled aluminum, for example, is used widely throughout the transportation industry because of its strength and lightweight qualities. Automakers also use massive amounts of steel each year, which has caused many to scramble in order to determine whether any materials were sourced from Kobe Steel.

As transportation manufacturers, rail, air, and automakers continue their investigations, Kobe Steel’s disclosure remains an important reminder of the need for accountability in the manufacturing sector, as well as the repercussions that can follow such errors and fraud. Such scenarios have had major and widespread consequences in the past, including defective Takata airbags used by numerous car companies. Those defects led to the largest auto recall in the history, as well as over a dozen deaths and numerous injuries.

As a law firm that has earned national recognition handling cases involving consumers seriously injured or killed by defective products, Clark, Fountain, La Vista, Littky-Rubin & Whitman continually tracks notable recalls, consumer product advisories, and breaking news concerning potential defects. We also offer our support and representation to victims who wish to learn more about their rights and how they may be entitled to pursue product liability claims.