Hoping to right itself after a year of scandal and an ongoing decline in sales and earning, Nissan was counting on a new management team that official moved into place at the beginning of December, but fractures are already showing, with one of its top executives tendering his resignation.
As vice chief operating officer, Jun Seki was the designated hands-on manager of Nissan’s turnaround plan, working alongside new CEO Makoto Uchida and COO Ashwani Guptha. His departure comes as another setback for a company that has been hammered by defections since the arrest of former Chairman Carlos Ghosn in November 2018.
“I love Nissan and I feel bad about leaving the turnaround work unfinished, but I am 58 years old, and this is an offer I could not refuse,” Seki told the Reuters news service, referring to his decision to join Nidec, a Japanese electric motor manufacturer.
(Nissan to get hit with $22M fine for underreporting former CEO Ghosn’s salary)
Seki noted that he would actually lose money by leaving Nissan, but he told Reuters that he wasn’t being forced out, nor did his departure come because he had been passed over during the search for the automaker’s CEO spot.
Among the many executives who have departed Nissan this past year was CEO Hiroto Saikawa. He had ordered the internal probe that uncovered alleged evidence of corruption that, in turn, led to the arrest of Ghosn, the 66-year-old executive facing trial in Japan next spring. Among the charges against the Brazilian-born Ghosn, Japanese prosecutors allege he hid millions of dollars in income. But the Nissan probe eventually revealed that Saikawa had also underreported his own income, leading to his decision to retire.
The shake-up has hit virtually every corner of the company though sources have told TheDetroitBureau.com that it has been especially hard on foreign executives. One of the first high-profile departures last winter was Jose Munoz, a Ghosn disciple who was serving as Nissan’s chief performance officer.
Ghosn’s arrest managed to shine a harsh light on a company that was already in serious trouble, both sales and earnings taking a sharp tumble during the fiscal year that ended March 31. The automaker launched a major turnaround program in April, announcing plans to eliminate more than 12,000 jobs while cutting global production 10% and slashing 10% of its various model lines.
(Nissan shutting down some U.S. operations for two days in January)
The effort appears to be gaining some traction, Reuters reported. Citing two unnamed Nissan officials, it said the plan “is now on track to generate a cumulative few hundred billion yen in cost cuts and operational efficiency gains by the year to March 2022.”
It is unclear what impact the departure of Seki will have but he was playing a lead role in managing the effort. And there are other potential complications. The vice COO had been spending much of his time in Paris in recent months. That’s where French partner Renault in headquartered, along with the main offices of the Renault-Nissan-Mitsubishi Alliance.
The relationship between Nissan and Renault has been sorely strained the Ghosn affair – and was one of the reasons why the proposed Renault-Fiat Chrysler merger collapsed last spring. Seki was reportedly working to shore up the 20-year-old partnership, in part by changing the balance of power between the two carmakers. Currently, Renault holds a large enough stake to give it veto power over key Nissan decisions.
How Nissan will respond to the loss of Seki is unclear. He had been passed over in the search for a CEO to replace Saikawa. There had already been frictions between new chief executive Uchida, COO Guptha and Seki, Reuters reported.
The news service said Seki was first contacted by Nidec last spring but repeatedly dismissed efforts to recruit him. He was eventually won over by the motor manufacturer’s 75-year-old chairman Shigenobu Nagamori.
(New Nissan CEO aims to “regain trust,” “restore business performance”)
“It’s not about money. In fact, I will take a financial hit since Nissan pays us well,” explained Seki in his interview. “It’s probably my last chance to lead a company.”