Japan’s Kobe Steel has admitted to falsifying quality data for some of its products for up to a decade. It is said that the corruption has affected up to 500 firms worldwide. Kobe, which is Japan’s 3rd largest steel producer, is now facing considerable financial trouble as the number of potentially affected clients increases. Firms that have had direct and indirect dealings with Kobe Steel are now looking at the products they manufacture to see if they will have to pull back anything they produce. This includes major car manufactures like Toyota, GM, Mozda, and Honda as well as Boeing, the world’s largest manufacturer of passenger jets. Mozda, Honda, and Boeing have already admitted to using Kobe Steel materials in their own products. Although many Kobe’s clients have already stated that the safety quality of their own products were not affected, it is looking like Kobe will have to some compensation to pay to their clients.


Payments to their clients will affect Kobe drastically, especially following the $1.8 Bn drop in value that the company suffered following the scandal. Now even companies that do not have direct dealings with Kobe are checking their products. Airbus, the world’s second largest producer of passenger jets, has stated that they do not buy directly from Kobe, but are looking down their supply chain to see if any of their products they buy have been produced with Kobe materials. This scandal will have wide spreading effects, there are many products that could have been produced with Kobe steel, like your car or the plane you fly on in the coming holiday season. It is imperative that companies check their products’ safety if they were made with Kobe steel, and Kobe should alert all of its clients it has sold its products to. Kobe will have to pay for its corruption, hopefully they are the only ones that pay for their mistake.