Scandal-hit Kobe Steel has a “look the other way” culture, hometown residents say

Kobe Steel remains one of only two Kobe-based companies, along with Kawasaki Heavy Industries, that have revenues over ¥1 trillion a year. (Reuters)
Updated 05 November 2017
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Scandal-hit Kobe Steel has a “look the other way” culture, hometown residents say

KOBE, Japan: The fresh university graduate, eager to make a good impression on the job at one of Kobe Steel’s main plants in Japan, punched the wrong measurements into machines making steel pipes, causing a large batch to come out too short.
“I thought I was going to be fired,” recalled the former employee nearly 40 years later. But Shinzo Abe, now Japan’s prime minister, stayed on the job at Japan’s third-largest steelmaker for three years before entering politics in 1982.
Abe has called the steel industry the backbone of the nation. Kobe Steel, a 112-year-old company in south-central Japan’s Hyogo prefecture, has risen from wartime devastation and natural disaster but its past is littered with examples of corporate misconduct.
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’s reputation as a manufacturing powerhouse.
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.
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.
Kobe Steel, which has apologized for the tampering, declined comment for this article.
“The corporate culture was to look the other way even while you saw what was going on,” said a retired employee who worked at the company’s flagship steel plant, Kobe Works — a symbol of the city’s quick recovery from a 1995 earthquake that killed more than 5,000 people. The company’s other main plant in the area is Kakogawa Works, in the nearby city of Kakogawa.
“They were supposed to be instilling a culture that paid attention when improprieties were discovered,” the former employee said. “In the end they didn’t create such a corporate culture. That’s management’s responsibility.”
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.
In 2006, Kobe Steel admitted falsifying soot-emissions data from the blast furnaces at Kobe Works and Kakogawa Works.
The latest scandal reflects “exactly the same set-up,” said Shoichi Tarumoto, who was then mayor of Kakogawa. “It looks like nothing has changed at Kobe Steel.”
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.
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.
A senior official in local government who has dealt with the company for years said: “Kobe Steel always scouts the backstreets for shortcuts. That’s their nature.”
Although its local dominance has waned, Kobe Steel remains one of only two Kobe-based companies, along with Kawasaki Heavy Industries, that have revenues over ¥1 trillion a year. The Kakogawa Works is that city’s biggest company, vital as a local taxpayer and employer.
More than a third of the Kobe Steel group’s 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.
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.
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.
“If Kobe Steel suffers a blow, this is the area that will be most affected,” said Tsuyoshi Matsuda of Teikoku Databank’s Kobe office.
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.


Recording of crying children at US border adds to outrage

Updated 20 min 8 sec ago
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Recording of crying children at US border adds to outrage

  • Human rights attorney Jennifer Harbury said she received the tape from a whistleblower and told ProPublica it was recorded in the last week.
  • Homeland Security Secretary Kirstjen Nielsen said she had not heard the audio but said children taken into custody by the government are being treated humanely.

BROWNSVILLE, Texas: An audio recording that appears to capture the heartbreaking voices of small Spanish-speaking children crying out for their parents at a US immigration facility took center stage Monday in the growing uproar over the Trump administration’s policy of separating immigrant children from their parents.
“Papa! Papa!” one child is heard weeping in the audio file that was first reported by the nonprofit ProPublica and later provide to The Associated Press.
Human rights attorney Jennifer Harbury said she received the tape from a whistleblower and told ProPublica it was recorded in the last week. She did not provide details about where exactly it was recorded.
Homeland Security Secretary Kirstjen Nielsen said she had not heard the audio but said children taken into custody by the government are being treated humanely. She said the government has high standards for detention centers and the children are well cared for, stressing that Congress needs to plug loopholes in the law so families can stay together.
The audio surfaced as politicians and advocates flocked to the US-Mexico border to visit US immigration detention centers and turn up the pressure on the Trump administration.
And the backlash over the policy widened. The Mormon church said it is “deeply troubled” by the separation of families at the border and urged national leaders to find compassionate solutions. Massachusetts Gov. Charlie Baker, a Republican, reversed a decision to send a National Guard helicopter from his state to the Mexican border to assist in a deployment, citing the administration’s “cruel and inhumane” policy.
At the border, an estimated 80 people pleaded guilty Monday to immigration charges, including some who asked the judge questions such as “What’s going to happen to my daughter?” and “What will happen to my son?“
Attorneys at the hearings said the immigrants had brought two dozen boys and girls with them to the US, and the judge replied that he didn’t know what would happen to their children.

Several groups of lawmakers toured a nearby facility in Brownsville, Texas, that houses hundreds of immigrant children.
Democratic Rep. Ben Ray Lujan of New Mexico said the location was a former hospital converted into living quarters for children, with rooms divided by age group. There was even a small room for infants, complete with two high chairs, where two baby boys wore matching rugby style shirts with orange and white stripes.

Another group of lawmakers on Sunday visited an old warehouse in McAllen, Texas, where hundreds of children are being held in cages created by metal fencing. One cage held 20 youngsters.
More than 1,100 people were inside the large, dark facility, which is divided into separate wings for unaccompanied children, adults on their own, and mothers and fathers with children.
In Texas’ Rio Grande Valley, the busiest corridor for people trying to enter the US, Border Patrol officials say they must crack down on migrants and separate adults from children as a deterrent to others trying to get into the US illegally.
“When you exempt a group of people from the law ... that creates a draw,” said Manuel Padilla, the Border Patrol’s chief agent there.
House Minority Leader Nancy Pelosi, speaking to reporters during a tour of San Diego immigration detention facilities with Rep. Juan Vargas and other House Democrats, said family separation is a “heartbreaking, barbarian issue that could be changed in a moment by the president of the United States rescinding his action.”
“It so challenges the conscience of our country that it must be changed and must be changed immediately,” she said during a news conference at a San Diego terminal that is connected to the airport in Tijuana, Mexico by a bridge.  
US Sen. Ted Cruz of Texas announced late Monday that he was introducing emergency legislation intended to keep immigrant families together.
“All Americans are rightly horrified by the images we are seeing on the news, children in tears pulled away from their mothers and fathers,” Cruz said. “This must stop.”
President Donald Trump emphatically defended his administration’s policy Monday, again falsely blaming Democrats.
“The United States will not be a migrant camp and it will not be a refugee holding facility,” he declared. “Not on my watch.”
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Snow reported from Phoenix. Associated Press writers Elliot Spagat in San Diego and Mike Melia in Boston contributed to this report.