February 23, 2017 / 2:47 PM / 7 months ago

Ghosn hands Nissan reins to cost-focused lieutenant

REUTERS - Newly promoted to CEO at Nissan Motor, Hiroto Saikawa will bring a gruff, tough, no-nonsense approach to leading Japan’s second-biggest car maker at a time of rapid technological change in the industry.

The 63-year-old takes over in April from Carlos Ghosn, who engineered Nissan’s recovery from years of losses and debt through broad cost-cutting and dismantling the traditionally close ties with suppliers - the informal keiretsu network once key to Japan Inc’s success.

Saikawa, who joined Nissan from Tokyo University 40 years ago, has been groomed to take over from Ghosn, who was dubbed “Le Cost Killer” after making his mark at Michelin and then Renault, Nissan’s main alliance partner.

“There is no difference between what I think and what he thinks,” Ghosn said at a news conference in October when Saikawa was appointed co-CEO of Nissan.

People who have worked with Saikawa say he, too, is an aggressive cost-cutter, who won’t shy away from tough decisions if they can improve efficiency.

“Ghosn sees Saikawa as his equal,” said one executive who worked under Saikawa when he was chief competitive officer from 2013, noting Saikawa is one of the longest-serving members of Nissan’s executive committee.

After Ghosn, “Saikawa is the most decorated man in terms of producing tangible results,” said another senior Nissan group executive, who has also worked with Saikawa for many years.

“He doesn’t hold back,” one of the executives said. “He’s not afraid to embarrass people in a big meeting if he thinks they’re not doing the job. Some people might not like him for that, (but) he’s very strict, very strong and aggressive.”

For Ghosn, and others, that can be excused as it produces results.

“People in Nissan recognize him as a strong leader; he sets a target, and he will achieve it,” said a third Nissan executive. None of the executives wanted to be named given the personal nature of their comments.

Nissan Motor Co CCO Hiroto Saikawa attends a parade to promote Tokyo Motor Show in Tokyo, Japan, October 24, 2015. REUTERS/Toru Hanai/Files

Saikawa was tough and direct early in his career as a “tactic to get people to deliver results,” said one of the three executives, but has since dialled back somewhat.

“You can tell he’s changing: 10-15 years ago, he might have been gruff and almost militaristic, but now as he evolves as a leader, he’s much more diplomatic ... not so harsh.”

PARTS PROCUREMENT

Carlos Ghosn, Chairman and CEO of the Renault-Nissan Alliance, attends an interview with Reuters at Nissan's global headquarters in Yokohama, Japan, February 23, 2017. REUTERS/Toru Hanai

Saikawa - who also heads Japan’s auto industry lobby - has spent much of his career managing purchasing and supply chains, and helped Ghosn break up the keiretsu network to reduce costs and drive efficiencies.

As chief competitive officer, Saikawa was tasked with reducing Nissan’s manufacturing costs by saving money in raw material procurement, regulatory expenses and planning and development.

Two of the Nissan executives also said Saikawa was instrumental in putting together Nissan’s deal with Mitsubishi Motors Corp, the newest member of the three-way autos alliance. Nissan said in October it would take a controlling stake in Mitsubishi Motors, which is recovering from a mileage cheating scandal.

Ghosn and his opposite number at Mitsubishi Motors worked out a general agreement, and Saikawa pushed it through to completion, working on the details of the new partnership, the executives said.

While Ghosn will devote more time to the Mitsubishi Motors turnaround, and to Renault, where he continues as CEO, Saikawa has plenty in his in-tray: from trade ties with the new U.S. administration, and Britain’s fractious exit from the European Union, to tougher vehicle emissions laws and an industry shift to electric cars and autonomous driving.

While Saikawa, who has also served on the board at Renault, is cut from the same cost-reduction cloth as Ghosn, the balance, as before, will be to keep up the quality of Nissan’s cars while driving cost efficiencies.

“Nissan’s priorities remain the same: improving profitability while gaining market share, but these remain challenging to balance in certain markets,” said James Chao, Asia-Pacific chief for consulting and research firm IHS Markit Automotive.

Reporting by Norihiko Shirouzu in BEIJING, with additional reporting by Naomi Tajitsu and Maki Shiraki in TOKYO; Editing by Ian Geoghegan

Our Standards:The Thomson Reuters Trust Principles.
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