European Union air safety body urges halt on use of Kobe Steel products

Andrew Cummings
October 20, 2017

The U.S. Justice Department has already opened an investigation, and Japan's Ministry of Land, Infrastructure, Transport, and Tourism plans to look into the safety of vehicles using Kobe Steel parts.

As the steel-maker works to contain the fallout, it has briefed analysts that short-term liquidity isn't an issue as it seeks to generate cash including via asset sales.

The scandal puts another stain on Japan's manufacturing prowess after similar cases including automakers Mitsubishi Motors Corp (7211.T) and Nissan Motor Co (7201.T).

The company is still confirming the safety of six other items, including aluminum extrusions, copper products, iron powder and steel wire.

Despite the automakers statements, however, the data fabrication scandal is apparently deepening. Foreign and Japanese funds, property developers and firms unrelated to real estate are interested in bidding for the unit, which has assets of about ¥90 billion ($800 million), the people said.

At a separate news conference, Japan Securities Dealers Association Chairman Suzuki Shigeharu said, "A scandal at a large and famous company like Kobe Steel will damage the stock market and taint Japanese companies' reputation". Jefferies' Pham cited management as saying that customer feedback, including from beverage can producers and railway companies, is that no immediate recalls are required and products involved are not a safety concern.

Two other Japanese carmakers, Mazda and Honda, have also said aluminum plate purchased directly from Kobe Steel for use in hoods and other auto parts met their in-house standards, but they are still verifying the safety of components purchased from parts makers.

Representatives from Kobe Steel and Mizuho declined to comment on the deal.

Other reports by iNewsToday