High-level big shake-up, throwing Japan's 500 million yen deep in the "fake door" in Japan's Kobe Steel to make a comeback?

Kobe Steel (hereinafter referred to as "Kobe Steel") was the third-largest steel company in Japan in the auto industry overnight because of counterfeiting scandals.

Recently, Kobelco stated that the company plans to invest 50 billion yen (approximately RMB 2.93 billion) to increase the production of high-strength steel to meet the growing demand of automotive manufacturers for lightweight materials. This is the first huge investment since Kobelco suffered a "fake scandal."

The 50 billion yen will be invested in the Kakogawa Iron Works of Kobe Steel in Kakogawa, Hyogo Prefecture, Japan, to add a new production line and increase the annual steel production capacity by 240,000 tons. The current annual capacity of the plant is 540,000 tons. The production line is scheduled to start production in February 2021, mainly for the supply of factories from domestic automakers in Japan.

â–  Do everything possible to raise funds

In recent years, in order to meet stricter environmental standards and improve crash safety performance, automakers have continued to promote the lightweighting of automobiles. Kobelco expects that the market demand for high-strength automotive steel plates will continue to increase in the future, and it has therefore decided to increase relevant production capacity and production efficiency. In addition to Japan, Kobelco has also established production sites in the United States and China, and its joint venture plant in Ohio, USA, has also received approximately US$400 million in investment to install additional production equipment. It is expected to start operations in July 2019.

Kobelco also stated that the company will split its 1300 MW power project, which is planned to be built in Kobe, western Japan, into a new company on May 1st with the aim of “raising funds through project financing”.

In addition, on April 3, Kobelco announced that starting from April, it will adjust the prices of wire rods and rod steel products to the domestic and foreign markets, increasing the price of wire rods and bar products by 10,000 yen (approximately RMB 585.5) per tonne, partly because of raw materials. The increase in costs such as transport costs, on the other hand, is to ensure that there is a certain profit to maintain production.

Since fading out of the top 500 in the world in 2013, the business of Kobelco has been deteriorating. According to the Kobelco financial report, before the fraud scandal last year, the 100-year-old store had a net loss for two consecutive years. After the fraud, the company withdrew its earnings forecast for the year. In 2008, Kobelco’s operating profit exceeded 200 billion yen, which is less than 10 billion after 10 years. The fierce competition in the steel industry has placed Kobe Steel under tremendous pressure.

â–  Management Exchange

Kakogawa Iron Works is one of Kobe Steel's factories involved in the turmoil.

According to an internal survey conducted by Kobelco in 2006, the Kakogawa Ironworks Co., Ltd. had been engaged in counterfeiting or data fraud since 1977 and continued until 2001, which lasted for 24 years. The investment means that Kobelco is trying to get the relevant business back on track and it also means the new management of Kobelco.

On March 6th, Kobelco held a press conference in Tokyo, Japan, announcing that due to a change in product data by a subsidiary company, Kawasaki, chairman and president of Kobelco, also resigned on April 1. At the same time, Kim Jong-il, the deputy director of copper and aluminum products, also announced his resignation. According to informed sources, several other senior executives of Kobelco have made the decision to resign. Dozens of other mid-level managers face pay cuts, redistribution, or other rulings.

Kawasaki said he must admit that Kobe Steel is facing deep-rooted problems that have gone beyond a reasonable scope, involving corporate culture and the mentality of executives and employees. In an internal report, Kobelco attributed data fraud to a closed corporate culture, excessive pursuit of profits, and insufficient awareness of quality compliance. Corporate culture is closed, so that employees at the grassroots level can't report problems or think that there will not be any change even if they point out the problem. In particular, it is located in the heart of the disaster area, and it is in the 1970s. In response, he said: "There is absolutely no instruction from the headquarters."

“If you want the outside world to really feel the changes of Kobelco, the best way is to quickly carry out personnel adjustments and advance changes,” said Kawasaki. At the time, the statement of Kobelco was that the board would be convened in the near future to determine the new management structure.

On March 16th, Kobelco announced that the former deputy president, Yamaguchi Gong, had been serving as the president of Kobelco since April 1. On March 20th, Kobelco announced a series of appointments for the deputy director and executive director, but the chairmanship is not yet available. After the general meeting of shareholders in June this year, Kawasaki Hiroshi, like Kim Hwang-ming, may not hold the position of director.

â–  Affected customers increased to 688

Last year, Kobelco admitted falsifying specifications data for its aluminum, copper, and steel products, and it has affected about 500 customers for more than 10 years. According to the latest survey results, 163 customers have also been found to have received Kobelco's problematic products and have been affected by 688 customers.

In addition to Toyota, Honda, Nissan, Mazda, Mitsubishi, Suzuki and Subaru, more than 30 well-known large companies such as GM, Ford, Tesla, Daimler, Hyundai, Rolls-Royce and PSA Peugeot Citroen are also on the list. Column. Public transport, aerospace, defense security, electronic IT, energy, and other fields have all been affected and have plunged Japan's manufacturing reputation.

Although its reputation declined, it seems that Kobelco does not want to sit still and is still looking for new business growth points. This investment in high-strength steel for vehicles is one of them. In addition, the R&D aspect did not relax. According to data released by Kobelco, last year from April to December, the group’s R&D expenses was 22.8 billion yen, a year-on-year increase of 6.5%.

â–  Kobelco is a miniature of the Japanese manufacturing industry

In the past few decades of economic weakness, most Japanese companies have been burdened with huge operating pressures, and unscrupulous incidents are common.

In 2006, Toshiba admitted that it had tampered with the equipment data provided to the three nuclear power companies and the seven power companies. The energy companies had falsified the emission data of the production and production and were required to submit internal inspection reports. In 2008, Kobelco's subsidiaries were certified as product performance data. In the same year, Takata Airbags initiated a recall in North America for the first time, and then it became unmanageable and eventually destroyed the airbag giant. In 2016, Mitsubishi Motors and Suzuki Automobile apologized for fraudulent fuel consumption tests; in 2017, Kobelco’s data fraud scandal broke out. , Nissan's new car quality inspection problems followed, Mitsubishi Materials also admitted the existence of counterfeit product data behavior.

It is not a day's work for the “Made in Japan” to go down the altar. The fact that Kobelco is not new in the Japanese industry and there are deep social reasons behind it.

After World War II, Japan took manufacturing as the foundation of the country, and emerged a large number of world-class manufacturing companies and engineers. The "lifetime employment system" and "artisan spirit" made employees have a strong sense of belonging and responsibility for the company. However, after the economic bubble burst in the 1990s, the Japanese economy fell into a weak state and entered the so-called "lost two decades." As the economic downturn and aging age intensify, the "lifelong employment system" has gradually collapsed, and the number of dispatching and informal employees has increased. Their sense of belonging and responsibility is not strong. Professional ethics has declined, and the cultivation of engineers and skilled workers has also become faulty. Coupled with competition from countries such as China and South Korea, Japanese manufacturing industries have been hit hard. In order to pursue performance and eliminate short-term conflicts, some companies have chosen default fraud.

It can be said that the issue of Kobelco is the epitome of the entire Japanese manufacturing industry.