More Japanese Quality Safety Frauds Scandals now Mitsubishi! Same as SMRT!

[jumpmrt]

http://money.cnn.com/2017/11/23/news/companies/mitsubishi-materials-false-data-kobe-steel/index.html

Japan's latest scandal: Mitsubishi admits faking data
by Rishi Iyengar @Iyengarish November 23, 2017: 10:11 AM ET

Toshiba: Fall of a Japanese icon
Another day, another admission of wrongdoing by a Japanese corporate giant.

Mitsubishi Materials said Thursday that it had falsified data on multiple products -- including components used in cars and airplanes -- for more than a year, adding to Japan's growing list of corporate scandals.


At least two of the company's subsidiaries faked data to meet specifications set by clients, it said in a statement.

Mitsubishi Cable Industries had been misrepresenting data on rubber sealants used in automobiles and aircraft, the company added. Data was falsified for around 270 million units sold between April 2015 and September 2017 to a total of 229 customers.

Another subsidiary, Mitsubishi Shindoh, had been fudging details of some of its metal products for at least the past year, including brass and copper parts used in the automotive and electronics industries. At least 29 companies are believed to have bought the parts in question.

"We have not at this time identified any instances of illegal conduct or concerns relating to safety at either [subsidiary]," Mitsubishi Materials said. The company is part of the sprawling Mitsubishi (MSBHY) group.

It said it was impossible to estimate the financial fallout at this stage. Japanese markets were closed Thursday for a holiday.

Related: What's wrong with Japan Inc?

Japan Inc., once the envy of the world for its manufacturing prowess, has been struggling with a series of embarrassing controversies.

A month ago, Kobe Steel admitted to falsifying data on products sold to big clients such as Boeing (BA) and Toyota (TM), sending its stock tumbling more than 40%.

Mitsubishi is one of many companies affected by the Kobe Steel scandal, having used metal parts made with false data in its airplanes. The two companies also have a joint venture to produce copper tubes.

Related: Kobe Steel scandal ensnares Boeing and Mitsubishi

Shortly after the Kobe Steel scandal erupted, top carmakers Nissan and Subaru both admitted they had allowed uncertified workers to inspect vehicles. They recalled thousands of cars as a result.

Millions more cars around the world were recalled because of another Japanese firm, Takata (TKTDQ), whose exploding airbags led to multiple deaths and forced the company to file for bankruptcy in June.

Toshiba (TOSBF), meanwhile, has struggled with an accounting scandal and troubles over its nuclear power business.

This isn't the first corporate scandal Mitsubishi has faced, either. The company's automotive subsidiary, Mitsubishi Motors, admitted to cheating on fuel efficiency tests last year.

CNNMoney (New Delhi) First published November 23, 2017: 10:11 AM ET

 

[jumpmrt]

https://www.nytimes.com/2017/11/24/business/mitsubishi-materials-japan-quality.html

Mitsubishi Materials Adds to Japan Inc.’s Quality Problems


By JONATHAN SOBLENOV. 24, 2017

Continue reading the main story Share This Page
Photo

Mitsubishi Materials’ president, Akira Takeuchi, second from right, bowing with colleagues during a news conference in Tokyo on Friday. Credit Toru Hanai/Reuters
TOKYO — The president of Mitsubishi Materials apologized on Friday for the latest breach of quality standards to rattle corporate Japan after the company said it had falsified inspection data for components it sold to manufacturers of cars, aircraft and industrial equipment.

“I deeply apologize for causing great trouble to many customers and shareholders,” the president, Akira Takeuchi, said at a news conference, bowing deeply alongside other executives.

Mitsubishi Materials said the components it sold, including rubber seals used in aircraft and automobiles, met legally mandated safety standards and were therefore not dangerous. Still, the revelation is a fresh blow to Japan’s reputation for scrupulous high-quality manufacturing, following admissions of similarly deceptive practices at Kobe Steel.

Mitsubishi Materials faces additional scrutiny over the timing of its disclosure. The company said managers at one of three subsidiaries where the deception occurred became aware of the data falsification in February after an internal inspection, but they did not report the issue to superiors at the parent company until October. It took another month for Mitsubishi Materials to acknowledge the problem publicly.

Advertisement

Continue reading the main story
The Japanese minister of trade and industry, Hiroshige Seko, called Mitsubishi Materials’ conduct “a grave matter” and “a betrayal of trust in Japanese manufacturing.” Mitsubishi Materials’ share price tumbled 8 percent on Friday.

Continue reading the main story
Advertisement

Continue reading the main story
Manufacturing companies often ask suppliers to produce components to even higher specifications than legally required. Mitsubishi said that when its quality inspections revealed that products fell short of those standards, it sometimes faked inspection data to make it appear as though the products met them.

Mitsubishi said it had shipped products with falsified inspection data to more than 250 customers. It did not name the customers, but the company’s products are used in a variety of industries. Boeing, which buys jet components from Mitsubishi group companies, said it was reviewing its supply chain.

“The quality and safety of our products are our highest priority,” Boeing said in an emailed statement. “Boeing is aware of media reports and is reviewing the matter, and will take timely and appropriate action as necessary.”

In misrepresenting its products’ quality, Mitsubishi Materials was engaging in a deception similar to that practiced for at least a decade at Kobe Steel. In a series of announcements beginning last month, the steel maker acknowledged faking data about the quality of aluminum, copper and other products to make it appear as though they met standards promised to customers when in fact they did not.

In a report published this month, Kobe Steel blamed overzealous cost-cutting, lax oversight by executives and an “insular” corporate culture that discouraged employees from questioning improper but long-established practices.

Japanese carmakers have also been hit by revelations that they cut corners in their quality controls. Nissan and Subaru acknowledged last month that they had been allowing workers who lacked certifications required by Japanese regulators to inspect vehicles produced for the Japanese market.

In Mitsubishi’s case, one Mitsubishi Materials subsidiary, Mitsubishi Cable Industries, changed inspection data for rubber sealing products used in aircraft and cars, Mitsubishi Materials said. The deception began in April 2015 and continued until this year.

Another subsidiary, Mitsubishi Shindoh, manipulated data on the “hardness and tensile strength” of copper strips used in automobiles, Mitsubishi Materials said, while a third, Mitsubishi Aluminum, also shipped products that did not meet customer standards.

Mitsubishi Materials is part of the loosely affiliated Mitsubishi family of companies, with roots in one of Japan’s most powerful prewar industrial conglomerates. Today, various Mitsubishi businesses — others include Mitsubishi Motors, Mitsubishi Electric and the Mitsubishi UFJ Financial Group — operate independently of one another, but the Mitsubishi brand remains one of the most prestigious in Japan.

Continue reading the main story
Related Coverage

 

[jumpmrt]

https://blogs.wsj.com/briefly/2015/07/21/5-things-to-know-about-toshibas-accounting-scandal-2/


5Things To Know About Toshiba’s Accounting Scandal
Toshiba Corp., the 140-year-old electronics conglomerate that has its hand in everything from installing power lines to supplying iPhone parts, has been embroiled in an accounting scandal since May. The company’s chief executive announced his resignation Tuesday, and two previous CEOs who retained company posts are also resigning. Here’s what you need to know about the financial turmoil so far.

21 Jul 2015 4:50am
By
Lisa Du

• 1 Profits were overstated by more than $1 billion Share on Twitter
  Toshiba’s accounting problems primarily stem from company employees understating costs on long-term projects, according to an investigation by a former top prosecutor in Japan. This allowed the company to overstate operating profits by at least 151.8 billion yen ($1.2 billion) between 2008 and 2014, the investigation found. It also cited issues with improperly valued inventory.
  
  $1.2 billion
  Amount of overstated profit
• 
  
  
• 2 Two former CEOs get particular blame Share on Twitter
  The report said Toshiba CEOs put intense pressure on subordinates to meet sales targets after the 2008 global recession. It said the pressure often came right before the end of a quarter or fiscal year, which may have pushed certain employees to postpone losses or push forward sales on accounting. The former CEOs named were Atsutoshi Nishida (2005-2009), now an adviser, and Norio Sasaki (2009-2013), now vice chairman.
  
  Mr. Nishida, who came from the personal computer division, and Mr. Sasaki, who worked in the power business, were also known to be rivals who disliked each other. Both are resigning their posts effective Tuesday.
  
  Trio of CEOs: Atsutoshi Nishida, left; Hisao Tanaka, center; Norio Sasaki, right
  
  
  
  Bloomberg
• 3 A wholesale house-cleaning is under way Share on Twitter
  Toshiba said Tuesday that eight of 16 members of the current board of directors are resigning. It said additional resignations were likely later this month, meaning more than half the board will be gone. Four of the 16 directors came from outside the company, a proportion that is likely to rise.
  
  
• 4 Corporate governance is getting more attention in Japan Share on Twitter
  Prime Minister Shinzo Abe has made changes in corporate governance a key theme in his attempt to revive the Japanese economy, hoping changes will attract more outside investors. Last month, a new rule went into effect that required publicly traded companies in Japan to have at least two outside independent directors on its board.
  
  Toshiba has often been compared to rival Hitachi, which used the global recession to reorganize its business structure and has showed strong profit growth. Hitachi’s market capitalization as of Tuesday, 3.75 trillion yen, is more than twice Toshiba’s 1.6 trillion yen.
  
  1.6 trillion yen ($13 billion)
  Toshiba's market capitalization
• 5 It’s not over yet Share on Twitter
  Toshiba has yet to release its earnings for the 2014 fiscal year, which Japanese companies usually announce by mid-May. The company will also have a shareholders meeting in September to approve a new board.
  

More 5 Things

 

[jumpmrt]