Justice Seeks Records on Kobe Case

Written by Tim Triplett

The U.S. Justice Department wants to know if Americans are at risk as a result of the Kobe Steel quality scandal. The Japanese metal producer’s subsidiary, Kobe Steel USA, Inc., received a request from the Justice Department on Oct. 16 seeking related documents. Kobe officials said they plan to cooperate with the Justice investigation.

Kobe Steel’s stock price has plummeted by more than 40 percent following its admission Oct. 8 that it had falsified quality data and sold potentially substandard aluminum, copper and steel products to customers around the world, including American companies Boeing, Ford and General Motors. Some 500 companies may have received metal products with falsified test records dating back to 2007.

Kobe and its customers are scrambling to determine if metals that may not have been produced to the proper specifications were used in applications that pose a potential danger to the public, such as critical parts in automobiles or aircraft. So far, no specific safety issues or recalls have been announced.

The Justice Department scrutiny raises the specter of legal action against Kobe Steel, whose wrongdoings have shaken the confidence in Japan’s manufacturing industry.

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