Some Famously Efficient Japanese Manufacturers Are Now Lying to Compete

Japanese manufacturers were once held in awe for their mastery of flexible manufacturing and a continuous improvement mantra that revolutionized business practices the world over. Even now, for example, Fanuc remains the preeminent maker of sophisticated robots, sought by manufacturers from China to the U.S. But an increasing number of companies in China, South Korea, and elsewhere have found success emulating—and often besting—Japan’s long-established enterprises, forcing them to scramble.

The latest sign of just how desperate many Japanese companies have become to stay ahead of foreign rivals: Kobe Steel Ltd.’s admission this month that for years it has faked data on the quality of its aluminum, copper, and steel products. Those metals have been used in high-precision products made by hundreds of Kobe’s customers, including cars from Toyota Motor Corp. and bullet trains from Hitachi Ltd. Now Kobe Chief Executive Officer Hiroya Kawasaki is leading an internal committee to probe quality issues. And the U.S. Department of Justice has requested that Kobe Steel submit documents related to the fake data, the company said, adding that it will cooperate.