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CEO Ghosn Reflects on Iwaki’s Recovery

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1. It’s now over a year since the 3/11 disaster. Looking around this plant today, how do you assess the recovery in Iwaki?

Carlos Ghosn, CEO:

It has been remarkable. The plant has produced 300,000 engines this year, even though the events have happened.

Being in the situation that I’ve seen today, not only are the production lines fully working with the level of quality and organization that is totally normal, but seeing also the effort that the team have shown me, as they continue to work on improving quality – not only to maintain quality – but improving quality and continuing to work on breakthroughs in order to reduce the running costs, the investment costs is just remarkable. It looks like this plant has never been through destruction like the earthquake that hit one year ago.

2. You’ve spoken with the plant manager and factory staff. How is their story a metaphor for Japan’s recovery?

Engines on the production line at Nissan's Iwaki Plant.

CEO:

I think Iwaki has been an example to teach Nissan about how resilient the company can be, how much Nissan can stand up to the challenge no matter how sudden the challenge is.

But I think Iwaki has also been a symbol for Japan. Not only because it was hard hit by the earthquake, but also because it is not very far from the nuclear power plant that disrupted a lot of activity around the plant. The fact that people, in a very resilient way and in a very focused way, are trying to not only work on the short-term recovery, but also the long-term viability of the plant is remarkable.

3. Nissan won praise for making a speedy recovery here and in Thailand after the flooding. What has Nissan learned from those disasters and how do you ensure the company will react with similar decisiveness in the future?

CEO:

I think the disaster in Japan and the disaster in Thailand we learned a lot in terms of how to organize ourselves, how to react very quickly, what are the appropriate attitudes to have in terms of empowering people, making sure that we reverse the flow of things so that everyone can support the area that is damaged and the people who are able to take care in the area can really hold the power of the company will certainly help us in the future.

And I hope that we would never have to do this, but unfortunately we’re going to have to be prepared, transforming our processes and training our people.

We’re learning from everything that happened in 2011. It is going to be part of the knowledge that is so precious for Nissan.

4. What has changed since last year in terms of parts supply?

CEO Carlos Ghosn presses a button commemorating the start of a line in the Iwaki Plant.

CEO:

I don’t think that we can ever fix the problem. What we can do is make ourselves less vulnerable to the problem.

The fact that during the earthquake we discovered that we have Tier 3 and Tier 4 suppliers – only one – and that the whole industry was being supplied by one plant and when the plant stopped everybody found themselves without that electronic component, this is not going to be repeated again.

We are asking our own purchasing team to make sure that they go deep into Tier 2, Tier 3 and Tier 4, and make sure that we never depend on only one facility for anything which is this major. This is a big lesson. And the fact that we are taking all the consequences.

5. Nissan has pledged to make a million vehicles domestically. Have some of the headwinds that weigh against Japanese production started to ease – such as the strong yen?

 CEO:

Well, I think it’s too early to say. Obviously, a yen at 82 is better than yen at 76 to the dollar. But we’re still far from what I consider neutral territory, which is around 100 yen to the dollar. We’re still far from it.

So, yes, there is some relief, but we are still with the headwinds. I consider that the exchange rate today is still a headwind for all the major companies and we’re really insisting, pushing and lobbying, with all our colleagues in the industry for the government to take a lot of initiative to get the yen in more neutral territory.

 

Ian Rowley

Deputy Editor, Nissan Global Media Center

Cars, Management, Production, Suppliers, Technology

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