• Kyodo

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Kobe Steel Ltd., rocked by a data fabrication scandal, said Friday its internal probe has found that pressure to meet delivery dates was behind its product irregularities and unveiled measures to prevent similar problems in the future.

The steel maker said in a released internal report that its factory floor was under heavy pressure to meet deadlines and production goals. The company said it will take steps such as using more machines for data entry to avoid manual data manipulation, reviewing its quality certification system and increasing its workforce.

“I deeply apologize to our customers, clients and shareholders for causing so much trouble,” Kobe Steel CEO Hiroya Kawasaki told a news conference in Tokyo on Friday. Kawasaki said management had “prioritized delivery dates and production” and the company “was a closed organization that lacked balance.”

He added that he will “decide at an appropriate time” about his responsibility over the scandal.

Before a news conference, Kawasaki met with a senior industry ministry official to explain the cause of the scandal. In October, the Ministry of Economy, Trade and Industry instructed Kobe Steel to report back within a month.

METI’s Akihiro Tada, who met with Kawasaki, said the internal probe will become the first step to regaining public confidence. But he added that the truth behind what occurred and why would need to be unveiled by another probe being conducted by a third-party committee of lawyers.

“For many years, we could not raise profits and there was pressure to contribute to the company’s profitability as a whole,” a Kobe Steel source said, referring to its aluminum and copper sector, where most of the falsification occurred.

Testimonies have also revealed that some executives in the past gave tacit approval to the data manipulation. The closed environment of the factory floor, where a high degree of professional skill was required but no changes in personnel occurred, also likely helped to create an environment where such problems could develop, according to the source.

Last month, Kobe Steel established an external investigative committee made up of lawyers. A report by the committee will be put together by the year-end, when Kawasaki and other executives are likely to clarify whether they will take responsibility for the falsification scandal.

The company has admitted it doctored data on products and specifications for aluminum, copper, steel powder, materials for liquid crystal displays and special steel products supplied to 525 companies, from major carmakers to bullet train operators.

The affected materials have also been used in aircraft, rockets and defense equipment, a blow to Japan Inc.’s reputation for quality production.

Major carmakers including Toyota Motor Corp. and Honda Motor Co. have said their cars have not been impacted by using Kobe Steel materials. General Motors Co., Ford Motor Co., Airbus and Boeing Co. are reportedly investigating whether they used any of the products.

Last month, Kobe Steel said the Japanese Industrial Standard certificate for some of its copper products had been revoked by the Japan Quality Assurance Organization.

The company has also been asked by the U.S. Department of Justice to submit documents related to the scandal. The steel maker said it will face punishment if it fails to do so.

Due to the scandal, Kobe Steel has withdrawn its group net profit estimate for the business year through next March, saying it is unable to assess the impact.

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