Substandard metal parts used in Japan’s bullet trains


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Bullet trains were built with substandard Kobe Steel parts – Oct. 12, 2017

Central Japan Railway Co. (JR Central) N700 series Shinkansen bullet train

Planes, trains and automobiles — Kobe Steel’s fake product data scandal has now touched every major form of transportation.

Two big Japanese railway companies said Thursday that substandard parts from Kobe Steel (KBSTY) were used in the manufacturing of several bullet trains.

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The scandal came to light Sunday, when Kobe Steel said employees had falsified data about the strength and durability of thousands of tons of aluminum and copper parts sold between September 2016 and August 2017. They did not meet specifications agreed with customers.

Central Japan Railway (CJPRY), which operates high speed trains between Tokyo and Osaka, found aluminum parts used in the truck — the part that connects the wheels to train cars — failed to meet company standards, said spokesman Atsuo Utano. A total of 310 tested parts were found to be substandard.

Related: Kobe Steel shares crash again. Can it survive fake data scandal?

West Japan Railway (WJRYY) also found substandard Kobe aluminum parts in seven high speed trains made by Hitachi and Nippon Sharyo, according to West Japan Railway spokesman Shugo Nishimura. West Japan operates bullet trains between Osaka and Hakata.

Both companies said the components do not pose any safety risks, and that they are considering replacing them during routine maintenance.

kobe steel markets down

Kobe Steel’s admission this week sent shock waves through the global automotive and aerospace supply chains. Toyota (TM), Honda (HMC), Nissan (NSANF) and Mazda (MZDAF) have all confirmed to CNNMoney that they bought substandard parts from Kobe Steel, as did plane maker Mitsubishi Heavy (MHVYF).

Related: New corporate scandal shakes Japan Inc

Subaru (FUJHF) has also confirmed that it bought affected products. Subaru and Mitsubishi are major suppliers to Boeing (BA).

A Boeing spokesman has said the company was inspecting its supply chain for any substandard components. Ford (F) and GM (GM) said Thursday they are investigating any potential impact.

The fallout will likely continue. Kobe Steel President and CEO Hiroya Kawasaki told reporters on Thursday that there may be other cases in which data has been fabricated.

The Japanese government is demanding answers.

A government spokesman told CNNMoney that the Ministry of Economy, Trade and Industry has ordered Kobe Steel “to report the result of safety checks within around two weeks, and conduct a through investigation of the reason for data fabrication and prevention measures within a month.”

— Chie Kobayashi and Daniel Shane contributed to this report.

CNNMoney (Hong Kong) First published October 12, 2017: 6:56 AM ET


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