Better response needed to product data falsification

The fact that two more of Japan’s leading materials makers — Mitsubishi Materials and Toray Industries — have followed in the footsteps of Kobe Steel in admitting to falsifying quality test data on their products raises the question of whether the misconduct is isolated and limited to just a few firms. Keidanren (Japan Business Federation) Chairman Sadayuki Sakakibara, who headed Toray while the reported problems were taking place, said the group would call on its roughly 1,360 member companies to look into whether they have engaged in similar practices.

The companies whose subsidiaries have for years been manipulating test data when products did not meet contractual specifications say that safety was not compromised. The president of Toray, which learned of the data falsification at one of its units as long ago as July last year, said the firm would not have disclosed its problem had the Kobe Steel’s case not surfaced in October. They should reflect on the impact such practices have on the trust their clients hold in them and international confidence in the quality control of Japan’s manufacturing industries. The salient point is not the degree of falsification, or whether there was any practical damage to product quality, but that the cheating on product quality data was allowed to go on for so long.

Mitsubishi Materials said last week that three of its units — Mitsubishi Cable Industries, Mitsubishi Shindoh and Mitsubishi Aluminum — had been faking the data on products delivered to a total of about 270 companies in a variety of sectors such as automobiles and aircraft, ranging from rubber seals to brass strips for auto parts and aluminum sheets. Such practices are said to have been going on for years, and the head of Mitsubishi Cable said the firm kept shipping the products knowing that they may have problems after management learned of the misconduct in February.

Toray said Tuesday it has confirmed that its Aichi Prefecture-based unit Toray Hybrid Cord had shipped tire reinforcement cord and other products whose results on strength test were falsified to 13 clients, including Bridgestone and Yokohama Rubber, on about 150 occasions from April 2008 to July 2016. It said the group would try to prevent such problems from recurring by introducing a system within three years that would prevent the rewriting of automatically input quality test data.

In the materials sectors, whose products are delivered mainly to corporate clients in downstream segments of the manufacturing industry such as makers of finished products, there reportedly is an established practice in which products whose quality test results fall short of the required specifications are still delivered upon receiving the consent of the clients under certain conditions, such as discount pricing. Generally, quality specs are said to be higher than the minimum necessary level to ensure product safety. Both the Mitsubishi Materials and Toray units are believed to have abused the practice by shipping such products without obtaining client consent and instead altered the test data. Kobe Steel manipulated the test data on products delivered to more than 500 clients, including overseas firms, presumably to meet delivery deadlines promised to the clients.

Toray said two successive quality control managers at Toray Hybrid Cord who falsified product test data to make it look like they met the standards apparently skipped informing clients and obtaining their consent since the products fell just slightly short of the specs. Toray President Akihiro Nikkaku emphasized that there was no safety problem in the products in question and no laws were broken when the product test data were falsified. Even though the company learned of the problem last year, the president said the firm would not have publicly disclosed the misconduct if the Kobe Steel case had not emerged in October. He said the company made the decision to reveal the practice because it found a post on the internet regarding the practice at Toray Hybrid Cord in early November and thought it would be better to come clean instead of letting the rumor mill run wild.

Keidanren’s Sakakibara, who said he was not aware that the problem was taking place at Toray when he was president and chairman there (and did not appear to have been informed of the misconduct as recently as last week), said improper conduct concerning product quality can undermine public trust and international confidence in Japanese manufacturers. He needs to make sure that the nation’s manufacturing industry as a whole treats the data falsification scandal with the seriousness that it deserves and implements remedial steps as necessary.