Big companies ignored shoddy testing practices for decades

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Mitsubishi Electric Corp. is not the only major Japanese manufacturer that has been manufacturing its product tests for years.

Other big companies have also recently disclosed shoddy practices, some that have been going on for decades.

Japan Steel Works Ltd. announced on May 9 that it was improperly testing parts used in power plant turbines. Employees working to manufacture the products had asked those overseeing quality control testing to rewrite the data to ensure they met their delivery deadlines.

Japan Steel Works is one of the world’s largest manufacturers of rotor shafts used in power plant turbines.

Company officials admitted that fraudulent testing practices had been in place for about 24 years until February. But they also added that they have not confirmed any specific resulting issues related to the quality or operation of the product. They did not disclose the names of the companies the rotor shafts were sold to.

Toray Industries Inc. announced in January that it produced false test results of its resin products. The investigating committee investigating the case found that these practices had been going on for at least 30 years, with those in senior positions being aware of what was going on.

Toray announced on May 13 that eight executives, including Chairman Akihiro Nikkaku, would take pay cuts to take responsibility for the findings.

Recent revelations have emerged from the manufacturing industry one after another, although companies were urged to fundamentally review their testing practices around five years ago.

In 2017, Keidanren (the Japan Business Federation) asked its approximately 1,500 member companies and organizations to investigate their internal practices after irregularities occurred at Kobe Steel Ltd. subsidiaries. and Toray Industries.

Keidanren asked the companies to report any wrongdoing to the relevant government agency and disclose the findings.

Mitsubishi Electric was unable to uncover its latest testing issues, although on three occasions between fiscal 2016 and fiscal 2018 the company said it would investigate improper quality control practices in companies in its group.

Shin Ushijima, a lawyer familiar with corporate governance, said Mitsubishi Electric officials likely maintained a high degree of pride and arrogance that nothing could go wrong with their products.

“It is possible that there are still hidden irregularities,” he said. “To change the corporate culture, there must be a structure in which external board members can oversee and instruct a review process that spans several years.”

(This article was written by Kenji Izawa and Taiki Koide.)

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