{"id":50747,"date":"2017-11-06T06:22:36","date_gmt":"2017-11-06T06:22:36","guid":{"rendered":"https:\/\/www.biphoo.com\/bipnews\/?p=50747"},"modified":"2017-11-06T06:22:36","modified_gmt":"2017-11-06T06:22:36","slug":"scandalhit-kobe-steel-has-a-look-the-other-way-culture-they-say-in-hometown","status":"publish","type":"post","link":"https:\/\/www.biphoo.com\/bipnews\/business\/scandalhit-kobe-steel-has-a-look-the-other-way-culture-they-say-in-hometown.html","title":{"rendered":"Scandalhit Kobe Steel has a look the other way culture they say in hometown"},"content":{"rendered":"

Scandalhit Kobe Steel has a look the other way culture they say in hometown<\/span><\/strong><\/span><\/h2>\n

Scandalhit Kobe Steel has a look the other way culture they say in hometown: \u201cI thought I was going to be fired,\u201d recalled the former employee nearly 40 years later. But Shinzo Abe, now Japan\u2019s prime minister, stayed on the job at Japan\u2019s third-largest steelmaker for three years before entering politics in 1982.<\/span><\/p>\n

Abe has called the steel industry the backbone of the nation. Kobe Steel, a 112-year-old company in south-central Japan\u2019s Hyogo prefecture, has risen from wartime devastation and natural disaster but its past is littered with examples of corporate misconduct.<\/span><\/p>\n

Its admission last month that workers had tampered with product specifications for at least a decade is the latest in a string of scandals that has battered Japan\u2019s reputation as a manufacturing powerhouse.<\/span><\/p>\n

Clients around the world, including top carmakers and airplane manufacturers, have been scrambling to check whether the safety or performance of their products have been compromised.<\/span><\/p>\n

Workers, executives and shopowners in Kobe, a gritty, industrial city bordered by sloping hills where cattle are bred for the famed Kobe beef, said they were concerned but not surprised by the scandal.<\/span><\/p>\n

Kobe Steel, which has apologized for the tampering, declined comment for this article.<\/span><\/p>\n

\u201cThe corporate culture was to look the other way even while you saw what was going on,\u201d said a retired employee who worked at the company\u2019s flagship steel plant, Kobe Works – a symbol of the city\u2019s quick recovery from a 1995 earthquake that killed more than 5,000 people. The company\u2019s other main plant in the area is Kakogawa Works, in the nearby city of Kakogawa.<\/span><\/p>\n

\u201cThey were supposed to be instilling a culture that paid attention when improprieties were discovered,\u201d the former employee said. \u201cIn the end they didn\u2019t create such a corporate culture. That\u2019s management\u2019s responsibility.\u201d<\/span><\/p>\n

The company initially said some workers had falsified data on contract specifications for a relatively small amount of aluminum and copper products, but it later admitted the problem had spread.<\/span><\/p>\n

In 2006, Kobe Steel admitted falsifying soot-emissions data from the blast furnaces at Kobe Works and Kakogawa Works.<\/span><\/p>\n

The latest scandal reflects \u201cexactly the same set-up\u201d, said Shoichi Tarumoto, who was then mayor of Kakogawa. \u201cIt looks like nothing has changed at Kobe Steel.\u201d<\/span>
\nPAST PROBLEMS<\/span><\/p>\n

Kobe Steel has admitted taking part in bid-rigging for a bridge project in 2005, and failing to report income to tax authorities in 2008, 2011 and 2013. The company exceeded established limits for ground and water pollution in 2006.<\/span><\/p>\n

Illegal political funding to candidates in local assembly elections in 2009 prompted the resignations of the then CEO and chairman. And last year Kobe Steel admitted a subsidiary falsified data on stainless-steel products.<\/span><\/p>\n

A senior official in local government who has dealt with the company for years said: \u201cKobe Steel always scouts the backstreets for shortcuts. That\u2019s their nature.\u201d<\/span><\/p>\n

Although its local dominance has waned, Kobe Steel remains one of only two Kobe-based companies, along with Kawasaki Heavy Industries Ltd (7012.T), that have revenues over 1 trillion yen ($9 billion) a year. The Kakogawa Works is that city\u2019s biggest company, vital as a local taxpayer and employer.<\/span><\/p>\n

More than a third of the Kobe Steel group\u2019s 6,123 domestic customers are concentrated in Hyogo or neighboring Osaka, according to credit-research firm Teikoku Databank. More than half its customers are small and midsize Japanese companies.<\/span><\/p>\n

The other clients are spread around the world and include top automobile manufacturers, airplane makers, railways and nearly any industry that uses steel, aluminum or copper in any form. [nL4N1N834X]<\/span><\/p>\n

No safety issues have been found so far because of the tampering, but Kobe Steel has withdrawn its forecast for its first annual profit in three years. Whatever the eventual economic impact, the scandal is already affecting morale in Kobe city.<\/span><\/p>\n

\u201cIf Kobe Steel suffers a blow, this is the area that will be most affected,\u201d said Tsuyoshi Matsuda of Teikoku Databank\u2019s Kobe office.<\/span><\/p>\n

Kobe Steel acknowledges some customers have shifted orders to other suppliers. Major banks are instructing their Kobe area branches to keep close watch on the credit management at companies that do business with the steelmaker, bankers say.<\/span><\/p>\n

\u201cHEAVY MOOD\u201d<\/span><\/p>\n

The scandal \u201cisn\u2019t an open topic on the job,\u201d said a worker in his 30s, finishing the night shift around 8 a.m. at Kobe Works, a hulking jumble of rusting pipes, risers and tanks.<\/span><\/p>\n

\u201cNobody says it out loud, but I think people are worried,\u201d he said. \u201cIt\u2019s a heavy mood.\u201d<\/span><\/p>\n

Shinzaike, the local train station closest to Kobe Works, is home to several bar-restaurants that count the company\u2019s employees among their best customers. Since the latest scandal erupted, business has dried up, traders said.<\/span><\/p>\n

\u201cLooks like they\u2019re holding back from going drinking,\u201d said a pub owner.<\/span><\/p>\n

Reservations for year-end parties would normally be starting now, but there haven\u2019t been any yet, he added.<\/span><\/p>\n

Abe, who worked at both the Kobe and Kakogawa works, has called his years at Kobe Steel \u201cthe starting point of my adult life.\u201d<\/span><\/p>\n

Last year, according to media reports, he urged young people entering the workforce to follow his example of learning from mistakes at Kobe Steel.<\/span><\/p>\n

\u201cI got through it without incident,\u201d he said. \u201cI want you not to be discouraged by a few mistakes but rather do the best you can.\u201d<\/span><\/p>\n

Source:http:\/\/www.reuters.com\/article\/us-kobe-steel-scandal-hometown\/scandal-hit-kobe-steel-has-a-look-the-other-way-culture-they-say-in-hometown-idUSKBN1D5011<\/span><\/p>\n

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