Nov. 07, 2007
Compliance Reporting Issue re: Urethane-based Heat-resistant Building Construction Materials
OSAKA, JAPAN - November 5, 2007 - TOYO TIRE & RUBBER CO., LTD (TTR) publicly disclosed a compliance reporting issue that the company had most recently discovered at TTR's industrial products division (IPD) involving urethane-based heat-resistant building construction materials.
These construction materials are primarily used as wall and ceiling panels in various types of structures and are required by Japanese government regulations to be able to sustain heat and fire damage for a specified period of time.
According to TTR's recent internal investigation, beginning in 1992, IPD submitted to Japan's regulatory authorities the test results of sample construction materials that differed from those that were sold to commercial building contractors. Test samples contained ingredients that enhanced the heat and fire resistant capacity of these materials. In this manner, IPD subsequently obtained government type approval for several models of the construction materials. TTR has now determined that these materials were incapable of meeting government code.
Immediately following discovery, TTR senior management took the following critical steps:
- Notified the Japanese Ministry of Land, Infrastructure and Transport of the results of Toyo's internal investigation.
- Ceased the marketing, sale and distribution of the subject construction materials.
- Undertook to identify and notify the owners of buildings containing the subject materials to appropriately plan for and help coordinate prompt replacement with materials that met government code.
- Initiated a complete review of the corporate supervisory structure, and created an independent Product Quality Audit Office with direct reporting obligations to the Office of the President.
- Initiated plans to implement a continuing employee education program to reinforce strict adherence to and compliance with all laws and regulations, and strengthen understanding of and adherence to company policy, rules and procedures.
All of the subject construction materials were marketed and distributed for domestic Japanese consumption only, and has not been exported or sold for use overseas. At this time, TTR has identified 176 structures in Japan where the subject building materials were installed. TTR initially estimates the cost of replacing the subject materials at approximately 4 billion yen (US$35.4M). IPD's sales of the subject materials since 1998 were approximately 10 billion yen (US$87.3M).
The IPD unit is managed and operated separate from TTR's tire division, and this compliance reporting issue was isolated to IPD and the subject construction materials.
TTR has assured its global distributors, dealers and customers that all of its other products, including those designed, manufactured, tested and sold by its tire and auto parts divisions, meet or exceed international, Federal, Japanese, and EC government and industry standards, and are subjected to frequent and rigorous inspection and random testing, both internally and by original equipment customers and other third parties, to ensure the highest levels of integrity, quality and regulatory conformance.
Toyo Tire Corporation
Corporate Communications Dept.
Hyogo Head office Telephone: +81-72-789-9100 Facsimile: +81-72-773-3272
Tokyo office Telephone: +81-3-5780-8158 Facsimile: +81-3-5780-8159