IHI Corporation Admits to Falsifying Engine Fuel Consumption Data, Prompting Government Investigation

IHI Corporation, a leading Japanese engine maker, has admitted that its subsidiary, IHI Power Systems Co., falsified fuel efficiency data for over 4,361 engines, mostly for ships, produced since at least 2003 for both domestic and overseas markets. The data-rigging was uncovered at the company's plants in Niigata and Gunma prefectures, where fuel economy data was doctored during tests to make the engines appear more fuel-efficient.

Out of the 4,361 affected engines, 2,058 did not meet the specifications set in contracts with customers. IHI's senior executive officer, Hideo Morita, acknowledged that this was a "betrayal of our customers' trust" and a grave situation that has shaken the foundation of their manufacturing. The misconduct was reported by a whistleblower within the subsidiary in February 2024.

Japan's Ministry of Land, Infrastructure, Transport and Tourism has launched an investigation into the matter in April 2024 and instructed IHI and its subsidiary to investigate the incident and implement measures to prevent similar occurrences in the future. This is not the first time IHI has faced issues related to misconduct in its manufacturing processes, as the company had previously admitted to problems with aircraft engine parts in 2019.

Why this matters: The falsification of engine performance data by a major manufacturer like IHI Corporation raises serious concerns about the reliability and safety of affected engines, as well as the integrity of the company's manufacturing practices. This incident may have far-reaching consequences for the shipping and transportation industries, both in Japan and internationally, as well as for IHI's reputation and future business prospects.

IHI Corporation has expressed its deepest apologies for betraying the trust of its customers and causing significant inconvenience and concern. The company has established a special investigation committee to determine the cause of the misconduct and implement measures to prevent a recurrence. As the Ministry of Land, Infrastructure, Transport and Tourism continues its investigation, the full extent of the consequences for IHI Corporation and the affected industries remains to be seen.

Key Takeaways

• IHI Corporation admitted to falsifying fuel efficiency data for over 4,361 engines since 2003.
• 2,058 engines did not meet customer specifications, a "betrayal of trust" per IHI.
• Japan's transport ministry launched an investigation and ordered IHI to prevent future incidents.
• The data falsification raises concerns about the reliability and safety of the affected engines.
• IHI established an investigation committee to determine the cause and prevent recurrence.