The Japanese steel manufacturer and auto giant, Kobe Steel and Toyota, are looking to face some lawsuit in the United States. Both companies are looking to face lawsuits regarding the quality of their components in their vehicles.
According to reports, both companies are being charged for allegedly violating consumer protection laws and engaging in fraud. They are going to face charges over substandard metal components that may damage the overall performance of the unit.
Kobe CEO Stepping Down
This is going to be the first time that Kobe Steel is going to face a legal issue without their CEO. Hiroya Kawasaki, the company’s CEO, announced that he will be leaving the company after the scandal about the substandard quality issues.
Reports revealed that the Kawasaki is looking to step down after the alleged falsification of steel data has been abruptly exposed. The steel company has a known reputation for producing and creating high-quality manufacturing programs and products.
Former CEO Kawasaki recently said in an interview that, “We have more than 112 years of history and have worked hard for customers, thanks to the trust we had from customers," and "However, we have hugely damaged it."
According to other reports, some of the top executives of the company are also looking to step down and eave the company. These include; some of the senior executives, which are supposedly going to be fired according to a statement the company made.
Kobe’s Manufacturing Scandal Story
The steel manufacturer has been actively been tagged with these scandals since last year. Furthermore, the company has reported last year that some of their employees have been falsifying product data ever since the late 1970’s.
They have been regarded as Japan’s third-largest steelmaker. The estimated number of affected clients are at 605, and 222 of these are overseas. Moreover, Kawasaki’s resignation is looking to take effect on April 1.
Following the scandal reports and issues, Kobe Steel’s shares price managed to slump by a whopping 50% in the market. The company managed to recoup some of the losses as the scandal and legal issues die down.
Looking at Toyota, the company announced that the company’s units which are; Prius, Camry, Land Cruiser, and Lexus are all linked with the substandard steel, aluminum, and copper. Furthermore, the auto company declined to comment on the scandal.
The U.S. consumer complaint was filed last Monday in the federal court in San Francisco. According to the lawsuit, the auto company has the duty to disclose any defective vehicle components. Meanwhile, Kobe is looking to undergo a separate U.S. Justice Department probe.
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