Recently; Made in Japan; Encountering another crisis.

According to CCTV News, on April 24th local time, the large Japanese heavy industry company IHI announced that its subsidiary IHI prime mover had tampered with fuel data for ships and land-based engines. In order to make the test data look more“ Beautiful” Since 2003, out of the 5537 engines produced by the company for use in ships and other equipment, 4361 have been involved in data fraud, accounting for nearly 79%.

On the 25th, the Japanese Ministry of Land, Infrastructure, Transport and Tourism has entered two factories of IHI prime mover company located in Gunma Prefecture and Niigata Prefecture to investigate the tampering of engine data. It is reported that the former may have been falsifying data since 2001, while the latter may have been falsifying data since the 1980s. IHI Vice President Hideo Morita has bowed and apologized at a previous press conference, stating:; This is a betrayal of customer trust. The manufacturing foundation of the company has been shaken, and the situation is severe. ”

Chen Yan, the director of the Japan Enterprise (China) Research Institute, told First Financial that Japan has three major heavy industry giants, namely Mitsubishi Heavy Industries, Kawasaki Heavy Industries, and Ishikawajima Harima Heavy Industries, now known as IHI; All three companies mainly produce internal combustion engines and engines, which are mainly used in aircraft, ships, automobiles, and other fields. IHI is particularly famous for its engine manufacturing in fishing boats and large vessels, with major aircraft manufacturers such as Boeing and Airbus being IHI's customers. ”
Starting from the shipbuilding industry

According to Japanese media reports, the issues exposed this time were reported by internal personnel of the company. At present, IHI prime mover company has mainly engaged in fraud in two aspects, namely engine fuel consumption data measured before shipment and engine gas emissions. It is not difficult to understand why engine fuel consumption data is falsified, for example, among similar products, products with lower unit fuel consumption are more likely to be favored by buyers. The falsification of engine gas emissions, on the other hand, is detrimental to; Green” For IHI prime mover companies that focus on selling and attracting points, it is a significant blow.

It is reported that the problematic products are not only used for ships, but also involve trains and power generation equipment. The Japan Coast Guard and Hokkaido Railway Company are customers of IHI, using the company's related products carrying problematic engines. In addition, there are 43 emergency generators used in nuclear power plants. At present, the manufacturer has stated that they have not received any reports of safety issues with the relevant products.

In response to the issue of data fraud, the Japanese Ministry of Land, Infrastructure, Transport and Tourism has required companies to conduct self inspection and rectification, and submit reports by the end of May. This measure temporarily prevents the delivery of engines manufactured by IHI.

What impressed Chen Yan about the data tampering scandal exposed by IHI this time is that firstly, the duration of the fraud lasted for 30 years, from the 1980s to the present; Secondly, the number of counterfeit engines is also quite large, with problematic engines accounting for as much as 79%; These devices are mostly used on ships, fortunately, there have been no major mechanical accidents caused by fraud so far, and they are mainly limited to the adjustment of energy consumption figures. If an accident occurs, the consequences would be unimaginable. ”

According to the company website information, IHI was founded in 1853 and initially only built a shipyard near Ishikawa Island. It has been in existence for over 160 years. After World War I, the company began to enter the automotive and aircraft manufacturing business and continued to grow through various mergers and acquisitions. In 2007, the former Ishikawajima Harima Heavy Industries was renamed to the current IHI. In its over 160 year history, IHI has achieved multiple accomplishments; First and foremost; For example, they manufactured Japan's first private steamship, the country's first liquefied natural gas (LNG) storage tank, and the world's longest suspension bridge - the Akashi Kaikyo Bridge.

In terms of the business scope involved by the company, IHI is actually involved in fields such as construction machinery, aviation, and marine economy, but engines are relatively the main business sector. In addition to manufacturing aircraft engines, IHI also undertakes maintenance work for aircraft engines and is an important military defense product supplier in Japan.

Of course, as the market changes, IHI is also adapting flexibly and adjusting its industrial layout. For example, the aerospace industry used to have only a 2% overall company share in 1965, but now it is the most profitable industry for companies. IHI was the first to participate in the development of Japan's aerospace technology, designing and producing the core components of rocket engines. For example, the small rocket that has attracted attention from various sectors in Japan; Epsilon; And Japan's first private rocket, Space One KAIROS, etc., are all developed with the participation of IHI's space division.

The latest news shows that on April 19th, IHI announced progress in the development of hydrogen fuel cell and aircraft electrification technology. The company stated that these two technologies are related to Japan's next-generation aircraft development project and will continue until 2029; This zero emission device can provide power for an electric aircraft with over 40 seats and a cruising time of over 3 hours. ”

Manufacturing scandals drag down the economy

In fact, the IHI subsidiary's alleged tampering with engine data is not the first scandal related to Japanese manufacturing. In recent years, various violations and fraud scandals have occurred among Japanese manufacturing companies.

According to Xinhua News Agency, on January 29th of this year, four engines produced by Toyota Motor Corporation, a subsidiary of Japanese car giant Toyota, were exposed; Falsification of exhaust emission test data; Toyota has decided to cease the shipment of related diesel vehicles. At the end of December last year, Daihatsu Industries, also a subsidiary of Toyota, admitted to 174 violations and suspended the shipment of all models currently in production both domestically and internationally. Previously, it was exposed that the safety test data for car side impact was falsified. The report released by the third-party investigation committee at that time showed that the problem of data fraud in Dafa Industrial Company had a long history, but since 2014, there have been mass violations. The report also alleges that the on-site manager was forced to commit fraud under multiple pressures such as production schedules and cost control.

In earlier 2021, Mitsubishi Electric was exposed for falsifying product inspection data, which could last for up to 30 years; In the same year, pharmaceutical company Kobayashi Chemical was also exposed for fraud, and more than 200 patients have suffered varying degrees of health damage after taking the company's drugs. In August 2017, Japanese steel company Kobe Steel was deeply involved in; Fake Gate” It was exposed that the product had tampered with data and passed off inferior products as good. At that time, Kobe Steel admitted that the related products were used to produce automobiles, Shinkansen, airplanes, etc., and were delivered to a total of about 500 domestic and foreign customers, involving many industries such as automobiles, railways, aviation, aerospace, etc; …

Chen Yan told First Financial that the outside world has always had great trust in the products of Japanese companies, but now not only small and medium-sized enterprises, but also large companies such as Toyota are frequently involved in fraud scandals. “ When companies no longer pursue quality and authenticity, and cannot achieve good quality and energy-saving models, choosing to maintain the surface through fraud will bring huge distrust to society towards Japanese products. This is a major issue that Japanese companies must address. ” He said.

Chen Yan emphasized that especially when Japanese manufacturing is facing increasing international challenges in terms of price, brand, quality, etc., and Japan's industrial production capacity is in a downward trend, such as limited manufacturing costs and time, the subsequent response of enterprises is worth watching. He hopes that Japanese companies can continue to maintain a steady production mode in the current competitive environment, rather than just pursuing superficial data.

Some interviewees who declined to be named also told First Financial that this is due to both Japanese corporate culture and the lack of innovation drive in Japanese companies; For example, the gap between modern corporate governance concepts and traditional Japanese corporate culture and management concepts has led to many problems for Japanese companies in pursuing short-term profits and long-term business strategies. ”

As Japan's manufacturing industry is embroiled in various scandals, the Japanese economy has also been dragged down to some extent. The Bank of Japan's short-term economic observation survey released on April 1st this year showed that the confidence index of large manufacturing companies in Japan fell from 13 in December last year to 11 in March, marking the first decline in four quarters.

Analysis suggests that in addition to the impact of the Peninsula earthquake at the beginning of the year, the previous shutdowns of some Toyota car factories due to fraud scandals were also one of the reasons for the decline in confidence. According to industry segmentation, the confidence index of automobile manufacturing companies has significantly declined from 28 in December last year to 13.

Chen Yan believes that if; Made in Japan; Failure to address the root causes of the problem and restore reputation in a timely manner will have long-term impacts on the development of the company and the Japanese economy.

The International Monetary Fund (IMF) stated in its latest World Economic Outlook in April that Japan's economic growth rate is expected to slow down from 1.9% in 2023 to 0.9% this year, and to 1% in 2025, due to the fading of one-time factors supporting growth in 2023, such as the surge in inbound tourism.