Kobe Steel's fake data scandal spreads

Kobe Steel's data falsification scandal is spreading globally. Global top 30 companies are found to have used the aluminum materials made by the company that failed to meet the safety standard.

In addition to the previously announced companies including General Motors, Ford, and Boeing, some 30 global companies such as Tesla, Daimler, Rolls-Royce and PSA Group (Peugeot Citroën Automobiles) used the sub-quality aluminum made by Kobe Steel, according to Nihon Keizai Shimbun.

Kawasaki Hiroya, chairman of Kobe Steel, had a press conference Friday afternoon and admitted to the company’s falsification, saying, "It is found that data has been falsified for steel products such as car engine parts and wire rods used for suspensions, bolts and nuts." This is different from what he told reporters at the Ministry of Economy, Trade and Industry the previous day when he apologized and said, "There are no suspicions when it comes to steel materials." Steel is the company's core business that takes up 40 percent of its entire sales. In particular, the company has nearly 50 percent of the global market share for wire rods, which are used to make car valve spring.

The leading Japanese steel maker admitted falsifying data for aluminum (19,300 tons), copper (2,2000 tons) and aluminum forgings (19,400 units), but additional suspicions are being raised for more materials.

JR Nishinihon, which used sub-quality products made by Kobe Steel, had a press conference Thursday and said, "We will replace the problematic parts during our regular inspection and claim reimbursements for the expenses."

Kobe Steel will be hit hard financially once affected companies start claiming compensation for damages. There is a possibility that the scandal might lead to distrust of the entire Japanese material industry.

Meanwhile, Hyundai-Kia Motor Company used Kobe Steel's aluminum for its electric cars Ioniq and Nero. The exterior of the bonnet (hood) of those cars used steel and the interior of the bonnet, which maintains the shape and cuts the noise from the engine, used aluminum. The price of aluminum is expensive than that of steel, but the company chose to use aluminum to reduce the weight of its cars.

"The parts in question have nothing to do with safety. Plus, Ioniq and Nero boast a high level of safety, as can be seen from the fact that they received five stars and four stars, respectively, from ‘Euro NCAP’ safety rating system,” said an official from Hyundai-Kia Motor Company. “But we are conducting additional safety tests on our car to guarantee safety."

As for Korean Air, it receives parts from Boeing, which is found to have been using Kobe Steel's products. "We are investigating the type and scale of the products supplied by Boeing," said a Korean Air official.

Won-Jae Jang peacechaos@donga.com · Se-Jin Jung mint4a@donga.com