CONTROL REINFORCEMENTS: Scandals are leading Japan's manufacturers to shore up internal controls.

Author:McCollum, T.

Following recent scandals involving some of Japan's biggest manufacturers, about 90 percent of companies surveyed say they are concerned the incidents will negatively affect the nation's reputation for manufacturing excellence. More than one-fourth of those companies say they are highly concerned, according to a Reuters Corporate Survey of more than 500 large and mid-sized Japanese companies, conducted by Nikkei Research.

Last year, Japanese manufacturing suppliers Kobe Steel Ltd., Mitsubishi Materials Corp., and Toray Industries Inc. admitted fabricating product data. Separately, Subaru Corp. announced it would strengthen compliance and oversight after admitting in October that uncertified technicians had performed final vehicle inspections for the past 30 years. In a December report to the Japanese government, the company said the importance of the inspections had not been appreciated by management and staff.

Like Subaru, nearly half (44 percent) of responding companies say they are working to strengthen quality controls in response to the scandals. Steps...

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