Kobe Steel blames data scandal on focus on profit, lack of controls

TOKYO, Nov 10 (Reuters): Kobe Steel Ltd said on Friday a lack of quality controls and a focus on profits was behind the widespread data tampering that has shaken up the supply chains of car and plane makers around the world.

Japan's third-largest steelmaker, which has posted losses in the last two business years, promised to automate more of its operations and reorganize its quality control systems to recover from one of the nation's biggest corporate scandals.

The 112-year-old company admitted last month that workers had tampered with product specifications for at least a decade, causing global automakers, aircraft manufacturers and other companies to check whether the safety or performance of their products had been compromised.

No safety issues have so far been identified from the data cheating, which mainly involves falsely certifying the strength and durability of products.

Kobe Steel was ordered by the Ministry of Economy, Trade and Industry (METI) last month to provide a detailed explanation of the data cheating and say what steps it would take to prevent future abuses.

Chief Executive Officer (CEO) Hiroya Kawasaki submitted the internal report on Friday to Akihiro Tada, director general of METI's manufacturing industries bureau, before releasing the report publicly.

"Clarifying your company's thinking on the causes of this incident is a meaningful step towards restoring trust," Tada told Kawasaki as he arrived to deliver the report. "I look forward to getting a proper explanation."