Business

Abuse of irregular but authorized shipments said behind Japan’s manufacturing scandals

JIJI

A common thread has emerged in the spate of data falsification scandals at Japan’s manufacturers: the abuse of a long-standing business custom called tokusai, an abbreviation of tokubetsu saiyō, which is literally translated as “special adoption.”

In principle, tokusai refers to the shipment of irregular products, with clients’ consent, that still meet safety criteria.

The practice is “common in the materials industry, in which deviations in product quality are relatively likely to occur,” an official at a major producer of nonferrous metals said.

But the process of obtaining consent for deliveries of such products is believed to have been neglected at Kobe Steel Ltd., Mitsubishi Materials Corp. and Toray Industries Inc., which have all been swept up in the data falsification scandals.

The concept of tokusai even had a different meaning at Kobe Steel, where it was applied to irregular products with manipulated data.

In October, Kobe Steel said the group had shipped aluminum, copper and other products with falsified quality data to about 500 customers, including automakers, aircraft manufacturers and defense companies.

Mitsubishi Materials, meanwhile, said in November that two subsidiaries had shipped substandard products after manipulating their inspection data. The affected customers included the Defense Ministry as some of the products were used in Self-Defense Forces aircraft and vessels.

And last week, Toray Industries revealed that data for tire materials and other products had been manipulated.

As a factor behind the misconduct, an official with Toray’s product safety planning office cited the view that because product standards are set with a sufficient margin, some manipulation of the product data will not inconvenience customers.

This view appears to have some supporters.

“Small shortfalls (against set product standards) will not immediately cause safety problems as there are sufficient architectural margins,” a senior official at West Japan Railway Co. said. The railway, also known as JR West, uses Kobe Steel aluminum in its bullet trains.

Industry officials are worried, however, that if materials manufacturers make light of these self-set standards, their reputation for quality, along with trust in the end products incorporating their materials, could be damaged.

“If you do something dishonest in the manufacturing world, you will certainly face a backlash,” said Yoshimitsu Kobayashi, chairman of the Japan Association of Corporate Executives (Keizai Doyukai), one of the nation’s biggest business lobbies.

“To do jobs in a foolishly honest manner is the way of top managers,” Kobayashi added.