Nissan execs taking pay cuts over bogus vehicle inspections

Nissan Motor Co. Chief Executive Hiroto Saikawa bows during a press conference at the headquarters of the automaker in Yokohama, Friday, Nov. 17, 2017. Saikawa and other executives of the Japanese automaker plan to return part of their salaries to show remorse over illegal vehicle inspections at the automaker’s plants in Japan. Earlier Friday, Nissan submitted to the government a report on its investigation into the scandal. (Suo Takekuma/Kyodo News via AP)

TOKYO  — Nissan Motor Co. Chief Executive Hiroto Saikawa and other executives of the Japanese automaker are returning a part of their salaries to show remorse over illegal vehicle inspections at the automaker’s plants in Japan.

Saikawa did not say how big the pay cuts would be or who else would take them. He said “voluntary return of a part of his pay” started last month and will continue through March 2018, the end of the fiscal year.

Earlier Friday, Nissan submitted to the government a report on its investigation into the scandal. It said the investigation found workers in training, not authorized to carry out inspections, were routinely conducting the tests, borrowing and using the “hanko,” or traditional Japanese seals that often are used in lieu of signatures, of certified personnel.

The faulty inspections affect only vehicles sold in Japan, not exports. Because of the problems, Nissan is recalling more than a million vehicles for further inspections

Saikawa said it was puzzling why the practice was routine for decades, beginning as early as 1979.

He said plant workers knew what they were doing was illegal and covered it up, including when government regulators came to check on the plants and the inspections. He also said it was “deplorable” that higher management was so out of touch.

“The style of our management was such that we did not fully understand the real situation on the ground,” Saikawa told reporters.

But Saikawa denied the scandal was related to Nissan Chairman Carlos Ghosn’s well-known management style of cost-cutting drives and ambitious targets.

Ghosn came from Nissan’s French alliance partner Renault SA in 1999 to lead a turnaround at a near-bankrupt Nissan.

When asked by reporters how else managers were going to take responsibility, Saikawa said managerial changes to fix the deeply embedded inspection problems were coming by March 2018. He declined to elaborate.

The company, which makes the Leaf electric vehicle, March subcompact and Infiniti luxury models, is checking to see if dubious practices applied to other plant operations.

Nissan plans to add more inspectors, Saikawa said. He said the company’s investigation found workers were wary of whistleblowing, fearing their complaints would go unheard.

The problematic inspections are not expected to result in quality problems because they are a final step before vehicles are shipped out, but dealers are being deluged with cancellations of orders.