Nissan Makoto Uchida: looking for the right direction in times of crisis

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Just weeks after Makoto Uchida was appointed head of Nissan in early December, news of the coronavirus epidemic in China reached the Japanese automaker.

His wife and two children were still based in Wuhan, the first center of the pandemic that has killed more than 64,000 people worldwide. The city is home to the headquarters of Nissan’s joint venture with China’s Dongfeng Motor.

“My employees are also my family, so we wanted to make sure they were safe and treated well. This comes first, “said Mr. 53, who led the company’s operations in China before becoming CEO.

Uchida said he was also very careful in how the company communicated its response to the virus: “We shouldn’t be exaggerating the situation or unnecessarily inviting panic or uncertainty among our employees. “

Since the outbreak, Nissan has regularly provided employees with health and safety updates and guidelines, as well as advice on how to stay connected while working virtually via Zoom or Skype. Mr. Uchida and other executives also communicate regularly with HR and line managers.

For both the business and the broader automotive industry, the lessons learned from the 2011 earthquake and Tohoku tsunami were essential. The detailed list of parts suppliers that had been compiled after the previous disaster helped Nissan determine which parts were imported from China and where shortages could occur, so that it could put in place contingency plans to produce them. elsewhere, according to Mr. Uchida.

Despite this, Nissan, with its heavy reliance on hundreds of components made in China, has become one of the first automakers in the world to cut production at home due to a shortage of parts. “We have to do a lot of planning. I still cannot predict what the impact of this uncertainty will be “with the pandemic now spreading in the United States, Europe and elsewhere,” said Uchida.

Even before Covid-19, the CEO had enough problems to deal with. The automaker was facing a serious crisis since the 2018 arrest of former president Carlos Ghosn for financial misconduct, which the ex-president denies. Losses were piling up on falling sales worldwide, and its 21-year alliance with Renault in France had almost collapsed. Mr. Uchida’s arrival was to mark a new start for the company. Instead, his former boss stole the show as he boldly escaped from Japan to Lebanon, launching a public tirade against Nissan executives for plotting to bring him down – a claim strongly contested by the company .

“People were a bit demotivated. In a way, they were worried about the direction the company was going in, “said Uchida.

Nissan factories around the world have now been temporarily closed due to city foreclosures and supply chain disruptions caused by the spread of the coronavirus, triggering the agency to downgrade its debt by two notches. Moody’s rating just above unwanted territory. The company’s shares have almost halved this year.

However, in a message to employees at the start of the new fiscal year on April 1, Mr. Uchida said, “We will have to endure the downsides and the uncertainties for a while. However, we can certainly weather the storm. “

At the start of his role as CEO, he gave priority to visiting the gemba – factories and design centers in Japan, the United States and Europe – where he held public meetings with employees. Staff asked their new boss how they could help management repair the Nissan brand. “Our individual capacity is much higher than what we offer today,” said Uchida.

“This is my job and that of management. . . to move the business in the right direction. “

As part of his brand rebuilding efforts, Uchida often spoke to employees about the new “Nissan Way”, saying that the group’s corporate culture needs to be transformed to put more emphasis on the needs of customers in each market. “If you take it seriously and act proactively, I think the future of Nissan will be better,” Uchida said in a message to employees in February.

Restoring that direction will cause pain, says Uchida. After years of dynamic research into higher market share and sales volume during the Ghosn era, the company has shifted its focus to profitability. But that means Nissan will focus more on the areas where it is strong and withdraw from markets where its position is lagging. The division of roles within the alliance, which also includes Mitsubishi Motors, will be more explicit, with each partner taking the lead in markets and technologies where they have an advantage.

Under its predecessor, the automaker had outlined plans to cut 12,500 jobs, but the rapid deterioration in business conditions and plant closings caused by Covid-19 will mean that there will be many more jobs lost. “We may have to resize rights more dramatically,” said Uchida, without giving further details.

Mr. Uchida is an outlier among Japanese Nissan executives, who have primarily stayed at the company since graduation. He spent many years of his childhood outside Japan because his father, who worked for an airline, was posted to places like Egypt and Malaysia. “This is where I found the diversity, the culture and the adaptability to different circumstances,” he says.

After studying theology, Mr. Uchida spent more than a decade in a trading house now known as the Sojitz. His first experience with the automotive industry was during his five and a half years in the Philippines, where the trading house had a joint venture with Mitsubishi Motors. He then joined Nissan in 2003, starting in the purchasing division before being posted to South Korea and then to China.

Multicultural experience was one of the key factors why the company’s nominating committee chose Mr. Uchida as the new CEO to lead during a period of uncertainty and tension within the alliance.

After two decades of individual leadership under the leadership of Ghosn, Nissan is experimenting with a troika management team that also includes Ashwani Gupta, who is now the chief operating officer. The approach has not been tested and critics say it does not tell who is actually running the business. But Mr. Uchida says, “If we set the right direction, I think this business has a lot of strength to revive. “

Three questions to Makoto Uchida

Who is your leadership hero?

I don’t really have one but six years ago I listened to a Japanese speaker from another industry on leadership. There is one thing he said that is always with me and that I try to do every day. He said, “Leadership means how much you can open your ability to listen to people.” Every morning, I try to ask myself, do I open up my ability to listen to people? If we start to ignore listening to our people, it will lead to mismanagement. I can’t seem to do it perfectly but I think it’s important.

If you weren’t CEO / leader, what would you be?

I would do totally different things. I wanted to be a chef. I love to eat. I like cooking. I like people who say it’s delicious. If you make the effort, the result is there when it comes to food. The result is always promising as long as you do it the right way. It’s more or less the same with companies. If you do it right, the result always comes.

What was the first leadership lesson you learned?

At Nissan, it was definitely diversity. That’s why I have to remember that trust, transparency and respect are very important. When I first joined (the alliance with Renault), it was very difficult because even the English are different. There is the French way of English. For example, they always say that global and global in French English means holistic. In Japanese English, when you say “essentially yes”, it means no. We have different cultures in the alliance, which is also very beautiful. Whether it is working with French, Japanese or American, each type of course gives you the flexibility to work in various circumstances.

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