Kobe Metals Crisis – Who Can We Trust?

We’re used to issues of quality and provenance coming to the fore in the food industry, with horsemeat and other scandals over the years,  chicken most recently, where consumers don’t end up getting (and eating) what they think they have paid for.

However, it increasingly seems that this deception is more widespread than we might have hoped in major companies around the world. We’ve seen automotive firms misleading regulators and consumers in terms of emissions testing, and now the third-largest Japanese steel producer, Kobe, has admitted falsifying quality data.

The steel, aluminium and copper affected has gone into manufacturing of many critical products, including planes, cars and bridges, although the good news is that so far the metal in question has not been found to be of inappropriate and lower quality.  You can read a lot more about these issues on our sister website, Metal Miner – this is an extract from their article on the topic:

Japanese standards have come to be accepted as a byword for quality in the manufacturing industry — but it would seem in a world where even Germany’s premier automotive giants can cheat and deliberately mislead customers, so can the Japanese. Who can you trust, consumers down the supply chain must be asking, if even Japanese and German manufacturers are prepared to lie and falsify quality assurance data?

In terms of Kobe, it is not clear yet quite how long this has been happening, and one can only hope that this scandal does not spread to other metals producers. But Kobe’s share price is not surprisingly down 40% in recent days. Back to Metal Miner.

The company is desperately trying to get a handle on how widely and for how long the falsification of paperwork has been going on, and whether it also extends to Kobelco, the group’s maker of construction equipment.

What is wrong with so many of our big firms? We have also seen Nissan recently recalling over 1 million cars after the discovery that “unauthorised inspectors” approved vehicle quality, while Takata Corp pleaded guilty recently to misleading automotive customers about the safety of its air bags. Is this part of the crisis of capitalism that the resurgent left-wing in countries including the UK would convince us is going to bring in a new socialist paradise?

Reading this the same day that the Times tells us that eBay paid just £1.6 million tax on their billion-pound turnover UK business, you can see why people might be attracted to political models that aren’t quite as comfortable for businesses.

Anyway, if you are interested in metals and related industries, then do read Metal Miner, which has great benchmarking information and data as well as all the news, insight and information you need in that sector.

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