Kobe Steel Ltd.'s chairman and president said Thursday that further cases of misconduct by the nation's third-largest steel maker may emerge as part of the burgeoning scandal over its falsification of inspection data for iron powder, aluminum and copper, which has already affected automakers and airplane manufacturers.
"General Motors is aware of the reports of material deviation in Kobe Steel copper and aluminum products", spokesman Nick Richards said.
The Japanese government urged steelmaker Kobe Steel on Wednesday to clarify the extent of manipulation of inspection data on steel, aluminium and other metals used in a wide range of products, reportedly including rockets, aircraft and cars, in the latest quality scandal to rock Japanese manufacturing.
Central Japan Railway Co, which operates bullet trains between Tokyo and Osaka, said aluminium components connecting wheels to train cars failed Japanese industry standards.
Shares in the company rebounded 0.5 percent Thursday, after plunging 36 percent over the previous two days.
At present, Kobe says around 19,300 tonnes of rolled aluminium and extrusions, 2200 tonnes of copper products, and 19,400 units of aluminium castings and forgings were shipped with faked certificates.
Since then the embattled firm has seen its shares plunge almost 40% - wiping more than $1.5bn (£1.1bn) off its market value. It also said subsidiary Kobelco Research Institute had fabricated data related to sputtering target material used in the production of liquid crystal displays and DVDs. "But they did not meet the specifications that were agreed between us and Kobe Steel", a Hitachi spokesman said.
Kawasaki said he will consider his responsibility as head of the company after fully investigating the causes of the scandal.
Kobe Steel was founded in 1905 and has been a bastion of Japan's manufacturing sector.
The Japanese government wants the steelmaker to report on the result of its safety checks within two weeks.
The company supplies almost 60 percent of the aluminium disc blanks used in the world's hard drives with production centres in Japan and Malaysia, according to its latest annual report.
"There are suspicious cases in Japan and abroad" that could involve further wrongdoing, as the ongoing investigation has not been completed, Hiroya Kawasaki told reporters after meeting with a senior industry ministry official.
"The credibility of Kobe Steel has plunged to zero".
If lenders were to take over Kobe Steel, a break-up of the company along business lines could be beneficial for shareholders and rivals, according to Thanh Ha Pham, an analyst at Jefferies Japan Ltd., who has a "Buy" rating for the company. Kobe's steel business would fetch roughly ¥200 billion ($1.78 billion), he said.
"I talked with management of JFE and I think they are very happy to buy Kobe Steel's steel businesses", Pham said Thursday on Bloomberg TV. An external law firm has been engaged to assist Kobe Steel with the investigation.