Saturday, October 1

President of Japan’s Nidec resigns over weak earnings


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TOKYO — Japan’s Nidec Corp, a major manufacturer of electric motors, has replaced its second-in-command and will choose the next president from within the company in the spring of 2024, it said on Friday.

Jun Seki, president and chief operating officer who once held the chief executive position, will resign to take responsibility for a deterioration in the company’s earnings, Nidec said.

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In the meantime, Vice Chairman Hiroshi Kobe will take over the role from Saturday.

The announcement comes after repeated attempts to quell concerns over finding a suitable leader to succeed founder and Chairman Shigenobu Nagamori.

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At a news conference on Friday, Nagamori said Kobe will only serve temporarily, as the company will choose five vice presidents in April next year and appoint one of them to be the president in April 2024. “As for why it took so long for my successor, I take full responsibility for that,” Nagamori said. “In retrospect, I was under the false impression of finding a better successor outside the company as opposed to inside.”

Nagamori, 78, recruited Seki, a former Nissan Motor Co executive, in 2020 to help Nidec become a major player in components for next-generation automobiles.

Seki became CEO in June 2021 but was demoted less than a year later with Nagamori expressing dissatisfaction with the company’s business performance and a fall in its stock price.

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Nidec’s automotive products unit, which was led by Seki, this year reported a first-quarter operating loss, hit by COVID-19 lockdowns, a global micro-chip shortage as well as high restructuring expenses and development costs. Nidec’s overall operating income was, however, essentially flat for the quarter.

On Friday, Nagamori said he “was shocked” by poor performance of the unit led under Seki, adding the company will not bring in people from outside the company to immediately take over the top role in the future.

He also reiterated his remarks from an earnings call in July that he wanted to hand over the reins in two years and denied speculation that he intends to remain in the role long-term.

Kobe, 73, has been with Nidec since its founding in 1973. Nagamori said he has an “absolute trust” in Kobe whom he has known for 55 years and will work together to improve the performance of the company.

Nidec’s shares have slumped 33% so far this year. (Reporting by Satoshi Sugiyama; Editing by Edwina Gibbs and Kim Coghill)



financialpost.com