Europe's aviation agency advises against using Kobe Steel products

PARIS/TOKYO (Reuters) - Europe's aviation regulator has advised aircraft manufacturers to stop using parts supplied by Kobe Steel 5406.T until their safety can be verified, following product data manipulation by the Japanese company.

FILE PHOTO: The logo of Kobe Steel is seen on the group's Tokyo headquarter building in Tokyo, Japan October 10, 2017. REUTERS/Issei Kato/File Photo

The move by the European Aviation Safety Agency (EASA) is another headache for Kobe Steel, which has shocked aircraft, auto, train and other industries with its revelations that it has been shipping some products to customers with falsified data on strength and durability.

The U.S. Justice Department is also see eking information from Kobe Steel and has requested documentation on products the company has sold to U.S. buyers, Kobe Steel said earlier.

The Justice Department inquiry could significantly raise the stakes for the Japanese steelmaker, Daisuke Yuki, a lawyer at Nozomi Sogo Attorneys at Law said.

The Japan Civil Aviation Bureau is investigating the issue and gathering information from Japanese manufacturers and Kobe Steel, a spokesman told Reuters on Wednesday.

“Where alternative suppliers are available, it is recommended to suspend use of Kobe Steel products until the legitimacy of the affected parts can be determined,” EASA said in a Safety Information Bulletin (SIB) dated Oct. 17.

EASA said the concern was not serious enough at this stage to warrant any compulsory measures.

A Kobe Steel spokesman declined to comment on the EASA statement.


The admissions that Kobe Steel’s supply chains have been tainted, affecting about 500 companies across the world, has sent its shares into freefall. The tampering went back more than 10 years, a source told Reuters earlier this week.

The scandal puts another stain on Japan's manufacturing prowess after similar cases including automakers Mitsubishi Motors Corp 7211.T and Nissan Motor Co 7201.T.

“All organisations that may have specified or used Kobe Steel products should do a thorough review of their supply chains in order to identify if, and when, Kobe Steel products have been used in their product designs and fabrications,” the SIB said.

Because the period of the data tampering has not been ascertained, the focus should be on “current production,” the agency said.

The world's two largest planemakers, Airbus AIR.PA and Boeing BA.N, have already said they are conducting a review.

Kobe Steel will hold a first round of bidding on Friday in the sale of a real estate unit, Bloomberg News reported on Wednesday.

The company has hired Mizuho Securities, the brokerage arm of Mizuho Financial Group Inc 8411.T, as an advisor for the sale of more than two-thirds of Shinko Real Esate, Bloomberg said, citing unidentified sources.

The Nikkei newspaper reported last week the sale may raise about 50 billion yen (£336.6 million).

Kobe Steel and Mizuho Securities declined to comment.

Mitsubishi Motor also said on Wednesday it is investigating how components from suppliers containing Kobe Steel parts have been affected by the data tampering.

Reporting by Ritsuko Shimizu and Tim Hepher; Additional reporting by Sam Nussey; Writing by Aaron Sheldrick; Editing by Elaine Hardcastle