Japanese Metal Manufacturer Faked Specifications To Hundreds of Companies (jalopnik.com)

schwit1 writes: Kobe Steel, a major Japanese supplier of steel and other metals worldwide, has admitted that it faked the specifications to metals shipped to hundreds of companies over the past decade.

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.

Comments

Were Tesla and SpaceX customers?

[Narcocide]

This could explain some conspicuous quality control issues in the materials, if so. There could be a huge lawsuit in the works here.

A lesson...

[Anonymous Coward]

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And when I hear from bankers that Dood-Frank can be repealed because the problems have been addressed, I LOL.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.

Re:A lesson...

[mellon]

Actually, I think the lesson here is that when you source material, you need to actually test to see if it meets the specifications. You should never assume that the seller is telling the truth.

Re: A lesson...

[SuperKendall]

How is it "unrealistic" to expect a steel company to correctly produce steel and accurately describe its properties? Other steel companies seem to manage this without issue.

But as another responder stated, if you are a company 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...

Because testing is cheaper than building a foundry

[raymorris]

> 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.