| BUSINESSWEEK ONLINE : NOVEMBER 1, 1999 ISSUE | ||||||||
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| INTERNATIONAL -- ASIAN BUSINESS
Commentary: Will Japan Inc. Copy Nissan's New Model? (int'l edition) Direct. Brutal. Uncompromising. These are traits that chief executives in the West often prize as essential to doing their jobs. Not so in Japan. There, the conciliatory, consensus-building chief has long been the model. But on Oct. 18, Japanese execs and investors got a clear view of how tough a Western exec can act when under pressure. That's when Nissan Motor Co.'s chief operating officer, Carlos Ghosn, announced his plans for fixing Japan's ailing No. 2 carmaker. Ghosn, who came from Renault, Nissan's new partner, outlined measures far more drastic than anyone anticipated. Only 11,000 job cuts were expected, but Ghosn promised a payroll reduction of 21,000. Five plant closings were announced--four more than anticipated. And a 50% cutback in the number of suppliers--a draconian call no one foresaw--is now in the cards. LITTLE ANGER. This was brutal and uncompromising, all right. But the extent of Ghosn's restructuring was not the only surprise. A bigger surprise was the Japanese reaction: They accepted the news. There was very little anger at the idea of a gaijin boss acting so tough. The comparative calm following the announcement offers an important clue to what's going on inside Corporate Japan these days. There's still plenty of resistance in many quarters to restructuring Ghosn-style. But in more and more companies, execs are quietly concluding that they need to take tough steps, too. And Ghosn's actions may break down any psychological barriers that remain to further restructuring. Nissan is not the only Japanese blue chip making painful changes. Hitachi Ltd. will eliminate more than 4,000 jobs at its headquarters. Sony Corp. will scrap 20% of its factories and reduce its head count by 17,000 workers worldwide by 2003. NEC Corp. will slash 15,000 jobs by 2002. In August alone, Japan lost 170,000 jobs year-on-year. ''It's not as if Nissan alone is doing something special,'' said Keiichi Nagamatsu, director of industrial affairs at Japan's prestigious organization for big business, the Federation of Economic Organizations, or Keidanren. There are other signs that Japan is ready to embrace more restructuring. In Paris, Socialist Prime Minister Lionel Jospin may try to make firing workers more difficult after tiremaker Michelin, Ghosn's former employer, announced that it would shed 7,500 jobs in Europe. By contrast, Japanese Prime Minister Keizo Obuchi has asked Nissan only to minimize the impact of its shakeup on its workers. BUFFER STEPS. None of this means that Japanese bosses will adopt en masse the take-no-prisoners style of their Western counterparts--or that wholesale restructurings will sweep through industry. Even Ghosn must act Japanese in some respects, especially when it comes to shrinking the payroll. Instead of outright layoffs, Ghosn is planning a Japanese mix of transferring workers to subsidiaries that will be spun off, offering voluntary retirement packages, and relying on attrition to thin the ranks. Unions may yet prove resistant to Ghosn's cutbacks. ''We will oppose anyone being asked to quit if they do not want to quit,'' says Yoshio Takahashi, chairman of the Federation of All Nissan & General Workers' Unions. ''We will also oppose any transfers to spin-offs that result in worse working conditions.'' Ghosn has said that it's too early to cheer his plan. But the feeling in Tokyo is that Ghosn has the backbone to carry through on cutting those jobs. And he has already done something important: He has spoken out loud about what this Japanese company needs to do. Japan's chiefs will probably not be as direct as Ghosn. But as they consider the future of their own companies, they will be thinking increasingly of him and the experiment at Nissan. By Emily Thornton _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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