COLUMN ONE : It’s Buyer Beware in Japan : Horror stories of defective products are proliferating in a nation whose goods have been synonymous with quality. A debate has erupted over protecting consumers.


Masue Kito, 60, died in her vegetable garden last September--crushed against a wall when she lost control of a rotary tiller as she put it in reverse to make a sharp turn. Hers was among the estimated 15 deaths a year from similar accidents involving the Mitsubishi machines.

It was a television built by Japan’s Sharp Corp. that apparently caused the death of 25-year-old Yoshiko Kaji one winter night in 1990. Her father, Chisao Kaji, noticed smoke coming from the family’s TV set earlier in the evening. He turned it off, pulled out the plug and the family went to bed. Within minutes, the house was on fire and Yoshiko was dead.

A recent fire at a Tokyo sports center was traced to a defective washing machine manufactured by Matsushita Electric. Matsushita had recalled the machines, but the recall was handled so quietly that many owners didn’t know about it, and a large number of washers remained in place.


In a nation whose products have become synonymous with quality, horror stories such as these have proliferated in the past two years, stoking a fierce debate over whether Japan needs to do more to protect its consumers. And the tales represent a blow to worldwide perceptions that industry here is especially attuned to quality and safety.

Japan, of course, continues to manufacture many outstanding products that have won raves from customers throughout the world. But when defective products cause harm, Japanese consumers have little chance of winning compensation.

Japan is the only advanced industrialized nation without what lawyers call “strict” product liability, a tough legal standard that holds manufacturers directly responsible for injuries caused as a result of defects in their products. Japanese victims must meet the much tougher standard of proving a Japanese manufacturer was careless or negligent.

Most victims of dangerously shoddy goods in Japan quietly settle out of court because legal costs are high, obstacles great and court awards low. These cases seldom get reported. Japanese courts have ruled on only 150 product liability cases in 50 years. In the United States, a single district court will hear thousands in one year.

Japan’s approach reflects a broader social attitude that more careful consumers, not safer products, are the best safety measure.

“In America you have 38 warning labels on a ladder,” says Akira Ishida, a customer relations executive at the Assn. for Electric Home Appliances. “It is a sad society that has to write all that down.”


Says Shogo Ogihara, an official of the Ministry of Transport’s auto inspection division: “Most accidents are caused by human error. The answer isn’t to have stricter standards, the answer is to teach people to drive better. Maybe America should do that instead of filing lawsuits all the time.”

Under pressure from business groups, a government advisory council in November delayed for the second year a decision on whether to recommend a stronger law. To head off demands to introduce laws with teeth, Japan’s bureaucrats are moving to beef up administrative controls over product safety.

Like so many other aspects of Japanese corporate culture and tradition, the nation’s posture on product safety has been dragged into the debate over whether Japan enjoys unfair advantages in international trade. Some American trade experts assert that the absence of tough product-liability laws means Japanese companies save mightily on research and legal costs and can sell products more cheaply.

At the very least, Japan’s weak consumer protection has resulted in a double standard. Televisions headed for the United States, for example, are encased in fireproof materials as required under U.S. standards. Japanese companies generally use a cheaper material for domestic models, although some companies voluntarily upgraded the materials after recent fires. Exported automobiles contain more costly steel reinforcement in the frame and more expensive non-flammable materials than autos for sale in Japan.

It isn’t because Japanese companies are less ethical. Given the opportunity, American companies operating in Japan tend to do things the Japanese way.

When it comes to warning labels, for example, American companies tone down the labels they use in Japan, to avoid scaring consumers. Some artificial sweeteners sold in the United States warn users that the products have been shown to cause cancer in laboratory animals. The products sold in Japan contain no such warning. While American cigarettes sold in the United States carry explicit warnings that smoking is a health risk, in Japan those same brands carry the standard Japanese warning: Be careful not to smoke too much.


Suffering from breathing problems, Fumi Murayama was advised that a mold growing on the concrete walls of her tiny apartment might be responsible. But a mold remover she bought from a U.S. manufacturer made her breathing more painful each time she tried to use it to wipe away the mold. Murayama learned later that similar products sold in the United States warned against use by people with bronchial problems. After a five-year court battle, the courts awarded Murayama $5,700 in damages, of which $1,000 was supposed to cover her legal fees. She is appealing the decision.

With less risk of lawsuits at home, critics say, Japanese companies can avoid the expense of extensive testing before selling goods to Japanese consumers. The domestic market, they say, has become, in effect, an inexpensive laboratory to work out the bugs in products before export.

To underscore the need for better consumer protection, Japanese lawyers are urging families of victims like Kaji and Kito to sue. That, in turn, has manufacturers warning that tougher laws would transform Japan into a litigious society, American-style, with higher business costs and diminished competitiveness.

There are several indications that Japan has a worsening product safety problem.

Matsushita, known in Japan for high-quality products, has been plagued with problems in recent years. In addition to recalling its fire-prone washing machines, Matsushita has recently been forced to replace, at a cost of $200 million, compressors on more than 650,000 Matsushita and Sharp refrigerators because they don’t cool properly. Matsushita was one of four Japanese manufacturers that have recalled large-screen televisions in the past two years because of their tendency to catch fire.

Last year, Japanese auto manufacturers were forced to issue recall notices covering 1.3 million cars, triple the number in 1983. The increase in recall notices may have resulted from orders from the Ministry of Transport, which has been under increased pressure to act as a result of investigations by the press and the Japan Auto Consumers Union documenting patterns of auto defects.

In an investigative report last month, Japan’s conservative public television station, NHK, revealed that in Tokyo last year there were 146 cases in which cars inexplicably burst into flames, triple the number of a decade ago.


“It doesn’t come out very clearly in the broad numbers, but there is something missing in Japan’s recent product quality that is hard to grasp,” says Hideyuki Ueno, vice president at JMA Consultants Inc., an affiliate of the quasi-public organization that introduced to Japan quality control circles--factory work groups that seek to improve manufacturing quality. “Products test well off the production line but develop problems later on.”

Product recalls, of course, are common in the United States too, but the cases in Japan have undercut the perception that Japanese manufacturers are less prone to produce defective merchandise.

Ueno attributes the problem to increased subcontracting of parts and a decline in the quality and diligence of factory workers.

Industrialists complain that Japan’s sharpest young people no longer want to work at factory jobs, forcing plants to take on lower-quality labor. Other analysts blame industries’ repeated efforts to cut costs during Japan’s economic slowdown.

Some observers also think Japanese manufacturers sacrificed quality when the domestic economy was booming and they were in a competitive rush to bring stylish new products to market.

Tsuyoshi Otsuki, head of Sharp Corp.’s consumer center, admits the rapid introduction of new products may have resulted in more defects, with companies failing to take the time to test products more rigorously. “When you are making lots of changes in parts to improve your products, all you have to do is make one miss and problems occur that don’t show up in tests,” he says.


Japanese auto makers, who in the past decade have doubled the number of models they offer, may also have suffered from the competitive pressure to pack many functions into their new model cars.

Takahiro Sumisaki, commander of the Fire Department at Himeji, a southwestern town known for its ancient castle, began to investigate car fires after noticing a pattern of conflagrations.

Sumisaki says an increase in the number of electronic wires for new functions designed into cars, the growing use of flammable plastics and new engines designed to reduce pollution by channeling gas fumes back into the engine are all factors that have made Japanese cars more susceptible to fires when they overheat or when sparks fly from worn wires.

In one case, a man was dragged from a burning car after an explosion woke up his neighbors. Investigators learned that the man had fallen asleep in the car with the engine running after a night of drinking. Sumisaki surmises that the victim left his foot on the gas pedal, thus unconsciously revving up the engine. The overheated engine destroyed a device designed to regulate gas flowing back into the engine, causing the gas to escape and ignite.

Consumers who try to hold manufacturers accountable for shoddy products face a daunting task. Plaintiffs in Japanese courts have a bigger burden of proof than those in U.S. courts. Japanese victims must have ironclad proof that a manufacturer’s negligence was the direct cause of injury, for example. In the United States, victims need only show that the product was defective and was the cause of the injury; manufacturers are responsible even if they took reasonable care to avoid defects.

“It’s virtually impossible to win,” says Toshiko Katayama, the attorney representing Chisao Kaji in a suit against Sharp over the fire that killed his daughter Yoshiko. “We not only have to prove the television started the fire, we have to prove what part was defective, why and how that part caused the fire.”


Moreover, because Japan’s legal system does not allow for “discovery”--the process by which plaintiffs seek corporate documents relevant to their cases--Katayama cannot get information on what Sharp knew about potential defects.

With such legal hurdles and weak regulatory oversight, unsafe products have stayed on the market in Japan for years--even decades, as in the case of the rotary tiller.

Gian Nyco Letter, an Italian who has lived in Japan for 17 years, was riding a bicycle manufactured by a Matsushita subsidiary in 1989, when one of the handlebars broke off, tossing him into a busy road. Fortunately, a truck was able to halt just a few feet short of rolling over him. One year later, a new handlebar supplied by the manufacturer also broke, again in heavy traffic.

The company didn’t take his complaint seriously, Letter says. “They said maybe I was too heavy,” recalls Letter, who weighs 180 pounds. Matsushita also hinted that by complaining, he was jeopardizing a subcontractor building the handlebar.

“It was offensive,” Letter says. He is now suing the company for $5,700. A Matsushita spokesman said the handlebar appeared to have broken “because of metal fatigue.” He said the company has no plans to redesign the handlebar because there have been no other reports of such problems.

When defective Japanese products cause injuries both in the United States and Japan, Japanese victims typically get a fraction of what Americans receive. Showa Denko, a chemical company, expects to pay $400 million this year to settle claims from hundreds of Americans who suffered muscle spasms after they used a contaminated food supplement sold by the company.


Although two Japanese victims have received secret settlements, other victims have been turned away. Showa Denko is refusing to share with Japanese plaintiffs’ lawyers information that American courts forced it to reveal to attorneys in the United States.

“When we think of traditional human relationships, we don’t think lawsuits are good,” says Ishida of the Assn. for Electric Home Appliances. “The beautiful way to do it,” he says, is through direct negotiations between consumer and company.

“Although consumers must be protected, (stronger product liability) would raise industry costs and weaken product development capability,” says Shuji Uragami, manager of the liability insurance division at Yasuda Fire & Marine Insurance Co., one of the largest in the field. “You can’t make progress if you are too conservative in coming out with new products.”

Japanese bureaucrats drip with sarcasm when talking about American laws. Referring to a U.S. regulation requiring hair dryers to turn off automatically when they touch water, Keisuke Murakami, of the Ministry of International Trade and Industry’s Consumer Economics section, said. “In Japan we don’t have that requirement. I guess it’s a difference in the way we use products.”

Although most of the serious safety problems with Japanese cars appear to be in models sold in Japan, safety problems are also cropping up in Japanese products sold in the United States. Crash tests performed for the U.S. Department of Transportation show that 1992 models of such popular cars as Toyota’s Tercel and Corolla provided substantially less protection for the driver in head-on collisions than 1988 models of the same car.

Japanese companies commonly do not promptly report safety problems to all owners in Japan. Two years ago, Mazda Motor executives took pay cuts after one particularly embarrassing disclosure. Leaked information revealed that Mazda knew certain models had serious defects that caused brake lights and cruise-control mechanisms to fail. Mazda, however, failed to notify customers of the potentially dangerous problems.


Japanese corporations, dismissing the need for stiffer product-liability laws, point to alternative techniques for assuring safety and customer satisfaction.

Matsushita recently announced a plan to mobilize employees and affiliated retailers to visit and conduct free safety checks at 10 million of their customers’ homes to make sure their products are in good working order. Sharp has launched a similar program to visit 3 million households. Both companies say that, while there may have been some lapses, fundamentally their products are safe and their quality-control programs sufficient.

But to Jujio Kito, son of the woman crushed by a Mitsubishi rotary tiller, the traditional Japanese response of shikataganai (it can’t be helped) is exasperating. “I don’t feel anger, I feel sadness,” says the grocery cooperative worker.

“But do you cry yourself to sleep or do you try to make companies more responsible?” Kito has decided to sue if only to make a point. “I have no feeling we will win, but if nobody does anything then it all ends right here.”