Mitsubishi Materials adds to Japan Inc.’s quality problems

Mitsubishi Materials president Akira Takeuchi
Mitsubishi Materials president Akira Takeuchi takes part in a press conference after the group admitted to falsifying product data in Tokyo on November 24, 2017. –Kazuhiro Nogikazuhiro Nogi/AFP/Getty Images

TOKYO — The president of Mitsubishi Materials apologized 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.

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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.

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 Friday.

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 if the products met them.

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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.”

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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 steelmaker acknowledged faking data about the quality of aluminum, copper and other products to make it appear as if 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.