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March 6, 2018, 7:21 a.m. EST

Kobe Steel CEO to resign over reputation-shaking data scandal

Head of company’s aluminum and copper division will also step down

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By Mayumi Negishi


Reuters
Kobe Steel President and CEO Hiroya Kawasaki bows as he speaks to the media last October.

TOKYO—Kobe Steel Ltd.’s chief executive said he would step down effective April 1 to take responsibility for a quality scandal that has shaken Japan’s reputation for top-notch manufacturing.

“To demonstrate that Kobe Steel has changed and to speed up change, we need new management,” said Hiroya Kawasaki, the head of Japan’s third-largest steelmaker.

Kobe Steel — which supplies the makers of cars, planes and nuclear plants—admitted in October to falsifying quality specifications on products shipped to hundreds of customers, prompting an investigation by the U.S. Justice Department. On Tuesday, the company said some of the data falsification went back 50 years.

Kobe Steel’s announcement opened the floodgates for similar revelations at other top manufacturers, puncturing national pride in Japan’s manufacturing prowess. In recent months, Mitsubishi Materials Corp. /zigman2/quotes/203392529/delayed MIMTF 0.00%   and Subaru Corp. /zigman2/quotes/200526066/delayed FUJHY +1.60%   admitted to quality-inspection lapses, while Nissan Motor Co. said it let unqualified employees perform final quality inspections on some cars. Those companies, as well as Kobe Steel, said no safety issues resulted.

An expanded version of this report appears on WSJ.com .

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