Kobe Steel executives deliver the results of an investigation into a data tampering scandal that has shaken up supply chains of car and plane makers around the world. As David Pollard reports, a lack of quality controls and a focus on profits are seen as key factors.
Kobe Steel's shares have fallen by nearly a fifth .... since it revealed the hows of its data tampering scandal a month ago. On Friday, they rose by nearly two per cent as it presented its report into the whys. (SOUNDBITE) (Japanese) KOBE STEEL PRESIDENT AND CEO, HIROYA KAWASAKI, SAYING: "We were lacking in efforts to comprehend problems regarding quality controls in factories, in a situation where we were generating profits." The report details how multiple workers and managers at nine production sites were involved .... in tampering with product specification data. Global carmakers, planemakers, even a rocket maker are among over 500 affected companies. If for now, fewer than ten want to recover costs of safety inspections. An external investigation is also under way. (SOUNDBITE) (Japanese) KOBE STEEL PRESIDENT AND CEO, HIROYA KAWASAKI, SAYING: "I'd like to consider how to take responsibility for the scandal at proper time after that ..." Along with its chiefs, the earnings outlook of the firm also in the balance ... After Kobe pulled its forecast for a first annual profit in three years, last week. It sees improving governance, and a culture where employees can talk freely, as key. And wants to automate more operations and reorganise quality control. (SOUNDBITE) (English) JEREMY STRETCH, HEAD OF G10 FX STRATEGY, CIBC, SAYING: "The company and or the Japanese government are trying to get ahead of the scandal. The question is are there further revelations to come and of course as we know from previous corporate scandals those revelations do have a habit of coming out of left field on occasion." But another plus for Kobe is that 474 affected customers have, it says, found no safety issues. A rise of four from earlier this week.