Surely the lack of inspectors is not the source of the problem, but rather the inadequate quality of the parts being produced.
Why did the 'automated testing equipment' fail to inform the operators that the product was deficient? Perhaps it did, but management opted to ignore the message.
Guess the virtue of having inspectors is that they may blow the whistle, unlike the 'automated testing equipment'.
Ianal, but is there not a clear cut case for corporate malfeasance here?