Definitely apocryphal, I heard the same story told from a local car manufacturer's perspective (in Austria, so other country and other industry). But it seems back then Japan really made a name for itself w.r.t. quality control. There are more such stories like this going around, like: "Can your process work with such small drills?". The answer: They send back the drill. Drilled.
Except for stories about total engineering fail or borderline fraud, nowadays I couldn't imagine any stories being told about about manufacturing in Germany, US or China.
Speaking of drills, I bought my Makita CX200RB drill set partly because it was manufactured in Japan. I already had a cordless, brushless Makita circular saw, so the alternative would have been something else Makita so I could share batteries. But the fact the units were made in Japan was a big selling point for buying that model.
US seems like a wild mix of rugged and reliable, to shooting themselves in the foot with wildly unsuccessful management and delivering overpriced and underperforming product.
There's still a lot of good (but generally expensive) stuff made in EU and Germany, it's just that "the brand" has been tainted by many companies peddling badly made things with "made in ...".
Fun fact: "Made in Germany" wasn't a sign of quality in the beginning. The British introduced that as a diss, to separate their domestic products from cheap imports.
Except for stories about total engineering fail or borderline fraud, nowadays I couldn't imagine any stories being told about about manufacturing in Germany, US or China.