Nissan inspection affair reflects a cultural crisis

Bloomberg

Nissan Motor Co. conducted vehicle inspections that don’t comply with Japanese regulations for almost four decades, raising questions about the company’s internal controls.
The company’s manufacturing division likely will take responsibility for the process, according to a person familiar with the situation who asked not to be identified because the information isn’t public. The regimen, which the government deemed faulty last month, has existed since at least 1979, according to an external investigation team the carmaker commissioned, said the person. The team’s report will be submitted before the Yokohama-based company’s Nov. 8 results announcement.
The team will release details of the investigation and suggest measures to ensure the problem doesn’t recur, according to a company statement.
The revelation broadens a crisis in Japanese industry, with manufacturers acknowledging disarray in quality control enabled by breakdowns in bureaucratic processes. Subaru Corp. also said it allowed uncertified workers to inspect vehicles before shipment. With Kobe Steel Ltd. admitting to falsifying product quality and Takata Corp filing for bankruptcy earlier this year after revelations that its air bags injured automobile passengers rather than protecting them.
The Nissan inspection affair reflects a cultural crisis for a nation whose image and culture is intertwined with its industry: Chief Executive Officer
Hiroto Saikawa has been criticised by local media for not bowing long enough while apologising about the incident, as is customary in Japan. Saikawa, 63, who was handpicked by Chairman Carlos Ghosn to run the carmaker earlier this year, has promised to investigate the matter.
Shares of Nissan dipped on the news. The benchmark Nikkei 225 index jumped 1.2 percent and closed at the highest level since 1996.
Nissan traces its roots to the 1930s. Jidosha-Seizo Kabushiki-Kaisha was established on December 26, 1933, taking over all the operations for manufacturing Datsuns from the automobile division of Tobata Casting Co., Ltd.. That company name was changed to Nissan Motor Co. on June 1, 1934, according to Nissan’s website.
After the initial revelations of uncertified inspection, an external team probing the lapses found that some Nissan plants had transferred final vehicle checks to other lines. As a result, employees who were not internally registered as final vehicle inspectors performed the check. The company will reconfigure the inspection process, and plans to add additional final inspectors, Saikawa said.