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Japanese Metal Manufacturer Faked Specifications To Hundreds of Companies (jalopnik.com)
Last week, Kobe Steel admitted that staff fudged reports on the strength and durability of products requested by its clients -- including those from the airline industry, cars, space rockets, and Japan's bullet trains. The company estimated that four percent of aluminum and copper products shipped from September 2016 to August 2017 were falsely labelled, Automotive News reported.
But on Friday, the company's CEO, Hiroya Kawasaki, revealed the scandal has impacted about 500 companies -- doubling the initial count -- and now includes steel products, too. The practice of falsely labeling data to meet customer's specifications could date back more than 10 years, according to the Financial Times.
For rockets the concern is less serious as they generally are not built for a long lifespan, but for airplanes and cars this news could be devastating, requiring major rebuilds on many operating vehicles.
As our Granddads believed it was.
This could explain some conspicuous quality control issues in the materials, if so. There could be a huge lawsuit in the works here.
Sell supplies and advertise twice the lifetime they actually have. Fold the company, let the scandal go public after investing in the company most likely to get rich fixing the problems caused by your fraud.
Double the profit, double the fun!
Seppuku time?
Seriously, though. Holy shit. The only way that company is going to survive in tact is if it is balls deep in some American politician's pocket that's willing to write up a bailout... Yay, capitalism.
This sig isn't original enough, it's time to come up with something witty...
How long until there is a documentable claim that this behavior killed somebody?
Next question that comes to mind: How long until I find out if my car was built with substandard materials?
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According to the latest ruleset, this post should be modded as Vorpal Flamebait +5.
I hope creimer's chair isn't made with Japanese steel!
It's a lesson when you put unrealistic expectations on people and their performance.
They will cheat to keep their jobs.
And you have to consider how you compensate people too. Incentives can go horribly wrong. Wells Fargo is a perfect example and the financial meltdown of '08 for that matter.
And when I hear from bankers that Dood-Frank can be repealed because the problems have been addressed, I LOL. No they haven't. And it's impossible to address them. Why? Human nature.
They may have addressed the problems (that they know of) but all you need is one Harvard MBA to start pulling 8 figure bonus checks because of a loophole he found. Then others will follow and we'll be right back where we started.
Uh oh... I just hope that they have not been lying about their steak too!
for last week's news
Did Kobe Steel build new headquarters at the earthquake prone area in Japan during the last 10 years by any change?
This is what we in technical terms would call a major oopsie.
It'll be nice to get $30 because my car is affected. In all seriousness I wonder if this will cause recalls?
Coffee: The lifeblood of intelligence in civilization.
Kobe Steel provides produces safety related components for nuclear power plants all over the world.
Finnish Metal is much higher quality:
https://youtu.be/aNJXS9X0yY0
You are welcome on my lawn.
I'm surprised this wasn't noticed earlier, if, in fact, the changes were substantial. All of the companies described in the summary have their own materials and finished component testing labs to verify strength, fatigue life, hardness, corrosion resistance, and so on. This is both to check incoming raw material and subsequent processing steps. No one in safety-critical industries trusts the word of a vendor without significant quality control agreements and auditing programs.
Were their metals not properly massaged and marbled as advertised? This sounds familiar...
The Japanese car majors are reporting "no problems" with Kobe aluminum they've tested from the past three years. Japan Rail has said similar about undercarriage parts. There are more years, more metals and more manufacturers involved, but the pattern is clear; these issues will be pencil whipped. There is margin for error engineered into transportation products and no one is going to rip up the floor boards over paper work unless there is a demonstrative problem.
Right or wrong that's how it will be.
Maw! Fire up the karma burner!
This is the kind of practice that blew up one of SpaceX's rockets. We never did learn who supplied those parts... so it might have been Kobe Steel.
Why would any consumer, be it an individual or a business, ever trust the claims that any vendor makes about its products?!
The assumption should be that the vendor's claims may very well be wrong, regardless of whether these claims may be accidentally or intentionally incorrect.
Let me give you an example. My team manages various servers. They aren't even overly critical, but we do want them to be working as much as possible. Some of these servers were running Debian 7. We wanted to upgrade them to Debian 8. For those who don't know, Debian 8 uses systemd by default. By using it in a stable release of Debian, we were going on the assumption that the Debian maintainers considered systemd suitable for production use.
However, we weren't idiots and we didn't fully trust that the vendor was correct. So we did our own testing. After doing some preliminary testing with systemd and Debian 8, we weren't at all happy with the results. We experienced far too many problems with systemd, and thus deemed Debian 8 unsuitable for our needs. Further investigation showed that most of the major Linux distros were using systemd, so we had to look to alternate vendors. We settled on FreeBSD, and put it through some extensive testing. It fared much better than systemd/GNU/Linux did, so we gradually moved our Linux servers over to FreeBSD instead. Thanks to our testing, we avoided serious problems, and in fact ended up using a much more reliable OS.
I would fully expect other organizations, especially those working on safety-critical products, to ignore what vendors claim and do their own thorough testing of any products or materials that a vendor may be providing to them.
How long until there is a documentable claim that this behavior killed somebody?
Next question that comes to mind: How long until I find out if my car was built with substandard materials?
There is "documentalbe" proof that folks received substandard material when they paid for better.
That is fraud. Whether someone died because if is irrelevant.
"Hey, you bought and paid for premium gas but I sold you regular. No one died. Get over it!"
"Hey, you thought you bought wild caught salmon but I sold you farm raised. No one died. Get over it!"
I could imagine how the forum posts would generalize this event to.
They are engineered to the limits of strength-to-weight, and they don't fail gracefully.
You cut your payroll so the big shots can make more money, you have to hide the cut rate quality you get.
I hope the stock holders are able to "Claw back" the money the executives have gotten over the last 10 years.
The stock holders are the ones who just got killed. Imagine, you have a small 50% margin on your life savings of shares.
You go on vacation for a week and come back BROKE because the stock went down to 40% of its value.
Your broker did not call you while you were out of touch.
Maybe a few of the top executive will use some Kobe steel they way their ancestors would, when they have dishonored their family names.
I would not put it past Indian or Chinese companies. But I have greater regard for Japanese and American companies. Used to trust Germans too, till Volkswagan diesel emissions.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
Nothing to see or hear. Move along little doggies. Move right along!
I test and read and am very skeptical.
I hear this all the time "Well! It looks like you want to sue me!"
Depending on my mood and how much of an asshole the person is, I'll answer accordingly:
"I don't sign anything without reading and understanding."
"Uh, I want to be sure and get my ducks in order. We don't want any misunderstandings down the road."
"No! I'm looking for where YOU are gonna FUCK me! Why are YOU so concerned with me having objections to this contract!!!"
"Get the fuck out asshole! You are a fucking crook!!"
When ever we get into X is good and Y is bad then you get in trouble
Yup. Labels are dangerous. Liberal vs conservative, Republican vs Democrat, Baptist vs Pastafarian, OSS vs proprietary, ... are all blinders getting us into us-vs-them mode and away from reality and objective choices.
until they can inspect their fleet. They didn't explicitly call the reason out but it's pretty obvious. The best part is these are likely to be structural problems not easily fixed.
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
I've been hearing about Kobe on English language broadcasts for a while. One constant throughout is a complete lack of contextual information.
We all know they "Falsified data" on strength and durability of aluminum and copper... what does this mean in real terms?. Did they just check the "A-OK" box and fill in fake data without bothering to run the tests? Did they run the tests and then knowingly alter results? What is the difference between what they reported and actual conditions of materials sold? What is the risk? I would be most interested in any references that address these basic questions.
So far every downstream manufacturer who has looked into this has not been able to find anything wrong or at least they are not admitting it publically.
> That is fraud. Whether someone died because if is irrelevant.
It's pretty relevant. If my grievance is that you sold me crappy metal, the resulting litigation will ultimately result in some type of restitution based upon loss of value directly, possible loss of market value, etc. If instead my grievance is that your crappy metal, sold to somebody else, cost me a family member, you are facing a much more open ended amount of damages- you could meaningfully be destroyed by a number of such lawsuits.
Jet fuel melts steel beams.
How closely you need to monitor the specifications depends entirely on how close to the limits of the material you're designing to.
For example, if you design a bridge with a 100% safety margin (design can carry twice its rated load), a 5% variation in the quality of the steel is not as critical as it would be when the design only has a 10% safety margin.
Someone using a 10% safety margin better be testing the metal at all stages of the process. Especially if you're relying on the specific properties of a particular alloy.
The reason it matters is it's an added charge. Right now legally speaking, they're guilty of fraud. If it comes to light that their fraud killed somebody, they'd get the additional manslaughter charge. Yes, corporations can't go to jail, but it basically raises the liability and they can be sued/fined for more.
My departed grandad always called anything from Japan Jap Crap. I suppose that's an apt description in this case.
46137
You're reading that wrong. It's not the difference between get over it and take action. It's the difference between huge lawsuits and possibly some jail time and even bigger lawsuits and many many years of jail time.
Actually, this is a common cycle. Post-WWII, Japanese stuff was considered crap. The country was war-torn and rebuilding its industrial base. Most emphasis was put on volume of production and expansion, little on quality.
As Japan modernized and "got" how to produce quality consistently, it earned a reputation for making the best stuff in the world. Korea and Taiwan followed the same pattern, about two decades behind Japan. (Most of the world's computer components are currently produced by Korean and Taiwanese companies. Even the stuff that goes into Apple's products.) China is currently in the first stage. The U.S. probably went through the same thing after it broke off from colonial Europe.
I suspect however that there's a third stage - complacency and mediocrity. The U.S. went into this in the 1970s and 1980s, which helped Japanese products to gain a fairly sizeable foothold here. Japan seems to be going through this third stage the last couple decades, allowing Korean and Taiwanese products to eclipse Japanese as considered "best" in the world.
> you basically cannot trust ANYTHING outsourced these days, and must constantly monitor it for quality. Which begs the question, why outsource then if you must also incur the added cost of verification and riding herd on QA
Your good options are:
1) Buy from a steel company and test a statistically appropriate number of samples
2) Build and operate your own foundry and test a statistically appropriate number of samples
You need to test either way. The question is, "which is better, buying steel from a company that is good at making steel, or build and operate your own steel company?" If you're in the business of making appliances, or bottle caps, or lawn sprinklers, or anything other than refining steel, buying from an existing steel maker is probably a better idea than launching your own foundry.
Of course there are also two wrong ways to do it:
1) Buy from a steel company and never test any of it
2) Build and operate your own foundry and never test any of it
Either of those will end up with you using sub-standard steel.
Actually, this is a common cycle. Post-WWII, Japanese stuff was considered crap. The country was war-torn and rebuilding its industrial base. Most emphasis was put on volume of production and expansion, little on quality. As Japan modernized and "got" how to produce quality consistently, it earned a reputation for making the best stuff in the world. Korea and Taiwan followed the same pattern, about two decades behind Japan. (Most of the world's computer components are currently produced by Korean and Taiwanese companies. Even the stuff that goes into Apple's products.) China is currently in the first stage. The U.S. probably went through the same thing after it broke off from colonial Europe. I suspect however that there's a third stage - complacency and mediocrity. The U.S. went into this in the 1970s and 1980s, which helped Japanese products to gain a fairly sizeable foothold here. Japan seems to be going through this third stage the last couple decades, allowing Korean and Taiwanese products to eclipse Japanese as considered "best" in the world.
The fact that one company got caught doing shitty work somehow translates into the state of quality of Japanese workmanship :/
What is Skip Lot Sampling?
Skip Lot sampling means that only a fraction of the submitted lots are inspected. This mode of sampling is of the cost-saving variety in terms of time and effort. However skip-lot sampling should only be used when it has been demonstrated that the quality of the submitted product is very good.
If the expected (or demonstrated) consistency of the product is poor, either test every sample or fire the supplier.
... they "Falsified data" on strength and durability of aluminum and copper... what does this mean in real terms?. Did they just check the "A-OK" box and fill in fake data without bothering to run the tests? Did they run the tests and then knowingly alter results? What is the difference between what they reported and actual conditions of materials sold? What is the risk? I would be most interested in any references that address these basic questions.
Agreed. All that the outlets I've read have let slip was: 1) there was a whisleblower, that got ignored, 2) all the numbers we've heard: 4% of aluminum sheets & rods, 200 buyers of iron powder, ongoing for up to 10 years, etc.
But what was the whisleblower's observation? Is reporting on that kind of detail just beyond the capacities of English language outlets?
My only guess is products which failed internal testing were by some process packed with good product/labeled as passing, the whisleblower had access to those internal tests but probably company's unclear on who misbehaved. Without internal failed test records, how else would they know "it was 4% of sales"?
If you're in the business of making appliances, or bottle caps, or lawn sprinklers, or anything other than refining steel, buying from an existing steel maker is probably a better idea than launching your own foundry.
The production quantities are clearly highly relevant because some businesses are fully vertically integrated and doing very well with it. Brembo S.A. for example, they actually have their own mines, let alone foundries — and control their production chain all the way through primary distribution. But they're the world's largest manufacturer of brake parts (a lot of it just isn't stamped "Brembo" — manufacturers have to pay extra for that!) so they can keep that whole chain busy on their own.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
This company is screwed.
There has been a rash of poorly made steel used in construction where I live recently, and although the link doesn't really say it, most of the failed steel came from Chinese factories.
The reasons for the poor quality might be more complex than just cost saving or poor controls. There is a cultural drive in some Asian cultures towards saying "yes" when the answer ought to be "no" because they find it difficult to stand up to those they see as in authority.
Although I suspect the importers bought the steel because it was cheap, we have a tradition of shitty construction over here.
Google what happened to the CTV Building during the Christchurch earthquake.
Takata, Mitsubishi, Toshiba, scandals just off the top of my head. Japanese workers may still be fanatically devoted to quality but management seems to be cutting corners more and more. Probably due to increasing price pressure from Korea China et. al.
Japanese quality probably reached its zenith in the late 80's to mid 90's.
How was it discovered? TFA does not tell about that.
I suspect however that there's a third stage - complacency and mediocrity. The U.S. went into this in the 1970s and 1980s, which helped Japanese products to gain a fairly sizeable foothold here. Japan seems to be going through this third stage the last couple decades, allowing Korean and Taiwanese products to eclipse Japanese as considered "best" in the world.
And just like the US, those responsible (unless they are peons) will go unpunished.
The last paragraph reads, in part, "For rockets the concern is less serious as they generally are not built for a long lifespan..." So fraud doesn't count for you? Who wants to find that the manufacturer delivered Less than what was Ordered and Paid for? This is illegal in the USA. What an idiotic statement by the article poster!
Well, it of course all boils down to economics. Rising economies produce mass-market goods cheaply, and get better at making stuff. When their perceived production quality comes closer to that of established quality manufacturers, these quality manufacturers will find themselves in a price war, something that they cannot sustain with their recently acquired standards of living. Rinse and repeat.
Your good options are:
1) Buy from a steel company and test a statistically appropriate number of samples
2) Build and operate your own foundry and test a statistically appropriate number of samples
If the steel company is labelling its steel, it needs to test. The buyer also needs to test. You make it sound like the work is equal, but the testing is going on twice in the outsourcing case.
Of course, outsourcing + in house testing can still be cheaper. But some work is repeated due to trust issues.
Bingo Dictionary - Pragmatist, n. A myopic idealist.
BEEF!
Hands up, everyone who has ever argued with an agenda-driven executive:
"We need to be careful about outsourcing. How do we know we are getting the same quality as in-house? We lose control of the entire process."
"That's stupid! Why create widgets in-house when there are specialist suppliers? They create them at half the cost and they take care of everything! We receive them at the shipping dock, ready-to-use! It's a No-Brainer! This isn't a Core Competency for us!!"