Current location:politics >>
EDITORIAL: Nissan rebuke shows preying on suppliers still exists in Japan
politics3561People have gathered around
IntroductionNissan Motor Co. has been unilaterally reducing its payments to numerous subcontractors in the illeg ...
Nissan Motor Co. has been unilaterally reducing its payments to numerous subcontractors in the illegal squeezing of suppliers.
The auto giant has been committing this exploitative act for many years. Such a business practice of exploitation by large companies leveraging their strong positions as contractors to impose their will on subcontractors is inexcusable.
Nissan must clarify the responsibility of its management for the violation and rid itself of “subcontractor bullying.”
Last week, the Fair Trade Commission issued a cautionary notice to Nissan calling on the company to take steps to prevent a recurrence. Nissan was found to have violated the subcontract law for unilaterally reducing the payment amounts from the originally agreed prices under the guise of “rebates.”
According to the antitrust watchdog, over a period of about two years until last spring, Nissan reduced the amounts due to 36 subcontractors, including makers of aluminum wheels, by more than 3 billion yen ($20.3 million).
This is the largest case of the kind uncovered by the FTC. This practice of coercive price-cutting to meet Nissan’s cost reduction targets has been ongoing since at least the 1990s.
As a major automaker, Nissan stands at the apex of a pyramid-like subcontracting structure, generating enormous profits as the beneficiary of this setup. It is responsible for ensuring that costs are fairly reflected in prices within its supply chain.
If the company unjustly siphoned profits from its small and midsize suppliers, that was an utterly indefensible act.
Nissan President Makoto Uchida apologized at a March 13 news conference for his company’s violation of the subcontract law. Nissan should review its past and current transactions with subcontractors to identify instances of forced price reductions and clarify responsibility.
It is true that the competitive strength of Japan’s automotive industry has been supported by relentless cost-cutting efforts by both car manufacturers and their suppliers.
However, such efforts must be based on an equitable relationship between automakers and their subcontractors and the benefits should be shared fairly according to the contributions.
Nissan’s exploitation of subcontractors is clearly unacceptable. However, subcontractors are generally in weak positions because they risk massive damage if they lose business dealings with key customers and find it difficult to resist demands for cost reductions from these major clients.
Therefore, businesses placing orders with suppliers have a duty to continually confirm the fairness of their transactions. Nissan’s chief executive should demonstrate the company’s solid commitment to this principle both internally and externally.
The government’s guidelines concerning the issues published last year also call on chief executives to clearly pledge to allow subcontractors to pass along higher costs in the prices.
Shifting burdens onto subcontractors has been one of the factors inhibiting wage increases among small and midsize enterprises.
The goal of realizing the virtuous economic cycle of rising prices and wage hikes, the principal focus of this year’s “shunto” spring labor negotiations, remains elusive without the widespread adoption of fair cost pass-throughs.
Profit generation through cost-cutting has been the primary corporate mantra in Japan for years as the nation’s economy was trapped in deflationary doldrums, but sustainable growth is unattainable if burdens are pushed onto subcontractors and workers.
Alongside wage increases and proactive investments, it is urgent to ensure compliance with laws and improve business practices. The FTC, for its part, must also intensify its monitoring to eradicate the unfair and abusive practice of squeezing subcontractors.
--The Asahi Shimbun, March 14
Tags:
Reprint:Friends are welcome to share on the Internet, but please indicate the source of the article when reprinting it.“Stellar Stories news portal”。http://mauritania.downmusic.org/article-35d599905.html
Related articles
Why US Catholics are planning pilgrimages in communities across the nation
politicsA long-planned series of Catholic pilgrimages has begun across the United States this weekend, with ...
【politics】
Read moreAnalysis: The coalition announcement was a three
politicsNZ First leader Winston Peters striking his 'this is so dumb' pose during the announcement of the ne ...
【politics】
Read moreWest Coast emergency staff preparing for deluge
politics...
【politics】
Read more
Popular articles
- The government wants to buy their flood
- OJ Simpson's alma mater, USC, stays conspicuously silent on his death despite honoring the ex
- GP practices asking patients to pay before seeing a doctor due to bill skipping
- Senior US diplomat suggests AUKUS will deter any China moves against Taiwan
- What's next for Iran after death of its president in crash?
- Public submissions on proposed anti
Latest articles
Who is Jacob Zuma, the former South African president disqualified from next week's election?
Department of Conservation 'spread too thin', Penny Nelson tells select committee
Person in critical condition after two
Daylight saving: When it ends, why we observe it and how to change the time on your phone
Storms damage homes in Oklahoma and Kansas. But in Houston, most power is restored
New Auckland surgical building cannot open due to lack of staff
LINKS
- Draft judicial explanation on marriage released for public review
- Residents of historic Devon seaside village brace for surge in giant ultra
- Hostile intention hides in US “support” for WHO
- Commentary: Uncertain times call for steady China
- Bundy family standoff: 10 years on, cattle graze disputed Nevada land
- Residents of historic Devon seaside village brace for surge in giant ultra
- U.S. a total hypocrite when it comes to safeguarding cybersecurity
- Letter from Lhasa: A return after 14 years
- China, U.S. should work together in same direction to stabilize, improve bilateral relations
- To build even closer relations between China, Central Asian countries