Another Japanese company has exposed a large-scale counterfeiting scandal, this time Astemo, Japan's third-largest auto parts manufacturer and a parts joint venture formed by Hitachi and Honda.
On May 19, Hitachi Anstamo announced the results of the investigation into the fraud of brake and suspension system quality inspection disclosed at the end of 2021. The results showed that 22 products produced by the company, including automobile/motorcycle parts, railway vehicle parts and industrial parts, were falsified in 15 domestic and foreign factories.
More than 200 million units of related products have been shipped, including automobile brakes and suspension systems, railway dampers, industrial dampers, etc., some of which can be traced back to 40 years ago. In addition to the failure to conduct regular tests and false reporting of test results, the investigation also revealed misconduct such as changing design specifications without the approval of customers.
Counterfeiting lasted for 40 years
At a press conference held on the same day, Hitachi Astamo President and CEO Brice Koch said: "We apologize for the great inconvenience and concern caused to our customers and other interested parties due to the misconduct. We take our findings seriously, deeply regret the misconduct and oversight that came to light, and will foster a strong compliance culture to prevent recurrence.
Image source: Nikkan Kogyo Shimbun
It is understood that on December 22, 2021, Hitachi Astello publicly admitted that the 57,000 brake parts produced by its Yamanashi plant and the 10.1 million suspension system components produced by the Fukushima plant had falsified acts such as failure to test and tampering with inspection data in tests and inspections, dating back to about 2000, and the counterfeiting period was about 20 years, and the problem products belonged to automobile and motorcycle parts.
Hitachi Astimo then conducted an in-depth survey of its approximately 140 plants worldwide. As a result, the Yamanashi Plant and the Fukushima Plant conducted other misconduct in connection with the testing and reporting of automotive parts, in addition to the previously disclosed behavior. At its plants, 11 plants in Japan, including the Yamanashi Plant and the Fukushima Plant, as well as one each in the U.S., Mexico, Thailand, and China, have the same inspection and reporting practices. The number of products in question has increased from more than 10 million previously announced to more than 200 million in automobiles, motorcycles, rolling stock, and industry. In addition, misconduct in some products has been going on for about 40 years, from January 1983 to April 2023.
In addition to 26 automakers, the products are supplied to 43 companies in the fields of railways, construction equipment, and industrial equipment. After the incident, the company did not plan to recall, on the grounds that the standards it set in research and development and production were very strict, leaving sufficient leeway, even if there was fraud, "there are no problems with safety and performance."
As for the reasons for the fraud, the company mentioned that the employees' awareness of quality control was insufficient, the quality inspection was formalized, the test equipment and personnel were insufficient, the internal reporting system was dysfunctional, and internal cultural problems were inadequate. In response, the company said it will introduce more test devices, promote automated testing, and strengthen the authority of quality control departments.
Same-door fraud is frequent
The breadth of Hitachi Anstamo's counterfeiting may not be unrelated to its complex composition. It is understood that Hitachi Astellimo was formed by the merger of Hitachi Group and Honda's subsidiaries. On October 30, 2019, the Hitachi Group and Honda announced that they will merge Hitachi's Hitachi Automotive Systems with Honda's Keihin, Showa, and Nissin Industries into a new company, whose main products include electric vehicle transmission systems, electronic control components, chassis components, electrical systems, engine parts, shock absorbers, brakes, and steering systems.
Image source: Nikkei
The merger has spawned Japan's third-largest auto parts supplier, second only to Denso and Aisin. The merger was completed and officially started operations on January 1, 2021, and the new company was named Hitachi Anstelomo, with Hitachi Group and Honda holding 66.6% and 33.4% respectively. That is to say, at the beginning of its establishment, Hitachi Anstamo was controlled by Hitachi Group, but it came from 4 companies, and the problem of counterfeiting was not the "work" of one company.
However, after the counterfeiting problem was exposed, the Hitachi Group was under more pressure, and one of the reasons may be that Hitachi counterfeiting is not uncommon. Before Hitachi Anstamo, the first "thunder" was Hitachi Chemical and Hitachi Metals, which were the core plates of the Hitachi Group. In June 2018, Hitachi Chemical was exposed to a semiconductor material testing fraud scandal and was sold the following year. In January 2020, Hitachi Metal received an anonymous report, launched an investigation, and then admitted in April of that year that some special steel products and magnetic material products produced by the company and its subsidiaries had problems such as illegal inspections and tampering with data. The counterfeiting of Hitachi Chemical and Hitachi Metal caused the Hitachi Group to deliberately strengthen the quality control of its subsidiaries, and then when the quality control department conducted quality correction audits, Hitachi Astimo internal employees reported it, which led to a large-scale investigation later.
At present, Hitachi Group intends to streamline its business, reduce its voice in Hitachi Astellomo, and introduce strategic investors to promote its IPO. To this end, on March 30 this year, Hitachi Group and Honda announced that they would change the shareholding structure of Hitachi Anstamo and introduce investor JIC Capital to give it 20% of the shares, while Hitachi Group and Honda each hold 40%. Shareholders also intend to follow the trend of "New Four Modernizations" and promote the transformation of Hitachi Astellomo, saying that "Hitachi Astamo will seek to accelerate investment in advanced technologies such as automotive electric powertrains, autonomous driving/advanced driver assistance systems, advanced chassis, and next-generation motorcycles."
Text: Zhang Dongmei Editor: Huang Xia Layout: Liu Xiaoye