Transparency and fair business practices have taken centre stage at Nissan Motor Co., with CEO Makoto Uchida leading by example in the wake of a supplier payment controversy. The Japanese automaker faced reprimand from the Japan Fair Trade Commission (JFTC) in March over allegations of slashing payments to top suppliers by approximately 3 billion yen (around $24 million) between January 2021 and April 2022.
In a proactive move to take responsibility and demonstrate accountability, Uchida revealed that he has voluntarily returned 30% of his salary since April. With an annual compensation of around 673 million yen (approximately $4.3 million), the CEO’s personal sacrifice underscores the company’s commitment to addressing the issue and restoring trust with its business partners.
During a briefing on Friday, Uchida acknowledged the gravity of the situation, stating, “The fact that our business partners are sharing concerns shows we have not been doing enough to listen to their challenges. I take the matter seriously.”
While Nissan refunded the disputed amount to suppliers in January, the JFTC has urged the automaker to conduct regular audits and implement comprehensive training programs to prevent future violations of fair trade practices.
Recognising the need for a thorough investigation, Nissan has established a dedicated committee to examine the issue. The committee has already begun interviewing Nissan employees, although it has yet to engage with the affected suppliers directly.
In addition to the internal investigation, Nissan has pledged to set up a hotline specifically designed to field complaints and concerns from parts suppliers regarding payment practices. This move aims to foster open communication and create a transparent channel for suppliers to voice their grievances without fear of repercussions.
“We are committed to restoring trust and fostering a collaborative environment with our valued business partners,” Uchida stated. “Ensuring fair and ethical practices throughout our supply chain is not only a moral obligation but also a critical component of our long-term success.”
Uchida further disclosed that Nissan has abolished the payment reduction system that sparked the controversy. For some entities, the system was terminated in April 2023, while for the remaining partners, it was discontinued in April of this year.
As part of its efforts to prevent similar incidents in the future, Nissan has been providing comprehensive training to its employees and developing robust prevention measures under the guidance of the JFTC. The company plans to present its detailed plans to the regulator around June, demonstrating its commitment to transparency and adherence to fair trade practices.