November 7, 2017
The fresh university graduate, eager to make a good impression on the job at one of Kobe Steel Ltd.’s main plants in Japan, punched the wrong measurements into machines making steel pipes, causing a large batch to come out too short.
“I thought I was going to be fired,” recalled the former employee nearly 40 years later. But Shinzo Abe, now Japan’s prime minister, stayed on the job at Japan’s third-largest steelmaker for three years before entering politics in 1982.
Abe has called the steel industry the backbone of Japan. Kobe Steel, a 112-year-old company in south-central Japan’s Hyogo prefecture, has risen from wartime devastation and natural disaster but its past is littered with examples of corporate misconduct.
Its admission last month that workers had tampered with product specifications for at least a decade is the latest in a string of scandals that has battered Japan’s reputation as a manufacturing powerhouse.
Clients around the world, including top carmakers and planemakers, have been scrambling to check whether the safety or performance of their products have been compromised.
Workers, executives and shop owners in Kobe, a gritty, industrial city bordered by sloping hills where cattle are bred for the famed Kobe beef, said they were concerned but not surprised by the scandal.
“The corporate culture was to look the other way even while you saw what was going on,” said a retired employee who worked at the company’s flagship steel plant, Kobe Works—a symbol of the city’s quick recovery from a 1995 earthquake that killed more than 5,000 people. The company’s other main plant in the area is Kakogawa Works, in the nearby city of Kakogawa.
“They were supposed to be instilling a culture that paid attention when improprieties were discovered,” the former employee said. “In the end, they didn’t create such a corporate culture. That’s management’s responsibility.”
The firm initially said some workers had falsified data on contract specifications for a relatively small amount of aluminum and copper products, but it later admitted the problem had spread.
In 2006, Kobe Steel admitted falsifying soot-emissions data from the blast furnaces at Kobe Works and Kakogawa Works.
The latest scandal reflects “exactly the same set-up,” said Shoichi Tarumoto, who was then mayor of Kakogawa. “It looks like nothing has changed at Kobe Steel.”
Kobe Steel admitted taking part in bid-rigging for a bridge project in 2005, and failing to report income to tax authorities in 2008, 2011 and 2013. (SD-Agencies).
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