TOKYO -- Nissan Motor is continuing to reel from a spate of financial misconduct scandals that has cost top executives, including disgraced former Chairman Carlos Ghosn, their jobs in the past year.
Nissan announced a new management team on Oct. 8, following the departure of President and CEO Hiroto Saikawa. But the automaker's outlook remains uncertain.
As Nissan's business performance deteriorates, it is casting a shadow over the management of its keiretsu parts suppliers.
Under the so-called keiretsu system, Japanese automakers maintain close-knit business networks with parts suppliers, with the carmaker atop a pyramid-shaped structure.
Oct. 18 marked the 20th anniversary of Nissan's announcement of its Revival Plan, under "Le Cost Cutter" Ghosn's leadership. That plan called for dismantling Nissan's pyramid.
Although the parts suppliers survived that purge, they once again find themselves in dire straits.
"At any rate, Mr. Saikawa's departure is welcome," an executive at a Nissan keiretsu supplier said. As far as the executive is concerned, Nissan's new management team comes as a relief, at least for now.
The Revival Plan called on Nissan to divest the bulk of its equity stakes in more than 1,000 parts makers. Nissan also leaned on these suppliers to cut prices, threatening to take its business to rival vendors if they did not.
As the division manager in charge of procurement and a board member, Saikawa had been at the vanguard of this effort.
The Revival Plan led to a V-shaped recovery but left Nissan's keiretsu suppliers with bitter memories. Some had to take harsh restructuring steps; others were forced to sell themselves.
Now many of them harbor a faint hope that with Saikawa's departure Nissan might review its current restructuring plan, especially the part that calls for parts vendors to trim their prices.
Perhaps "trim" is misleading. An executive at a major Nissan supplier in the Tokyo metropolitan area said Nissan wants price cuts that are double the size of what Toyota Motor and Honda Motor are lobbying for.
When Nissan's auto sales were humming along, its suppliers managed to cope with the punishing price cuts they were dealt by Ghosn's Revival Plan. But Nissan has since slumped. It has revised its expansion policy and now plans to cut 12,500 jobs across its global operations.
Amid the downturn, "we have no choice but to boost transactions with automakers other than Nissan by any means," an executive at one supplier said. "If we continue to receive price-reduction requests as in the past without a recovery in new auto sales, we could fall into the red."
Ahead of its name change to Marelli on Oct. 1, Calsonic Kansei in September decided to close four domestic plants due to sluggish sales to Nissan.
The company was once Nissan's largest supplier. Under the Revival Plan, Nissan intended to sell down its stake in Calsonic Kansei. Instead, it ended up acquiring more of the company and making it a subsidiary.
In 2017, Calsonic Kansei was brought under the umbrella of U.S. fund KKR. Later the supplier acquired Magneti Marelli, a major Italian auto parts maker, for 720 billion yen (about $6.6 billion).
Calsonic Kansei renamed itself Marelli, believing the world-renowned brand would help to symbolize its "departure from Nissan." But the company's rebirth has been marred by the need to reorganize its domestic production bases.
Calsonic Kansei, now Marelli, no longer has a capital relationship with Nissan. But 80% of its overall sales still come from Nissan.
In fiscal 2018, with Nissan having hit the skids, the parts maker's sales tumbled 15% from their peak in fiscal 2015.
As a result of the Revival Plan, Nissan has capital relations with only parts producers involved in the basic design of auto bodies, such as Jatco, Aichi Machine Industry and Nissan Shatai.
But there are still "hidden keiretsu" suppliers like Marelli that depend on Nissan for sales despite ending their capital relations with the automaker.
In fiscal 2018, Nissan-related sales accounted for 84.4% of Unipres' overall sales. At Yorozu, these sales came to 69.2% of the total, and at Kasai Kogyo they stood at 59.3%.
The three suppliers' stocks are now priced more than 50% lower than what they were two years ago.
Although all three have more than doubled their consolidated sales during the past 20 years, thanks to more orders from Honda and Toyota, they remain at the mercy of Nissan.
And Nissan's troubles remain, as exemplified by the infighting that took place over who would succeed Saikawa, a power struggle that grabbed headlines overseas and left parts makers with close ties to Nissan fretting.
There was a move by some within Nissan to endorse interim President and CEO Yasuhiro Yamauchi. While Executive Vice President Hitoshi Kawaguchi recommended Yamauchi, Nomination Committee Chairman Masakazu Toyoda, a former senior official at the Ministry of Economy, Trade and Industry, expressed skepticism about Yamauchi's appointment.
On Oct. 8, Nissan announced it had appointed Senior Vice President Makoto Uchida, once an executive at trading house Nissho Iwai, now Sojitz, as president and CEO.
Unlike those who started their careers at Nissan right out of school, Uchida's "free of constraints" background became the "decisive factor" in his appointment, one Nissan executive said. But Uchida's real ability has yet to be tested.
Rival Toyota is currently using its strong centripetal force to its favor in reshuffling its keiretsu suppliers.
While strengthening its links to software companies that are crucial in the making of so-called CASE technologies -- those that go into connected, autonomous, shared and electric vehicles -- Toyota is pushing ahead in realigning and consolidating group suppliers of brakes, transmissions and other conventional parts.
In this regard, Nissan has a lot of catching up to do. Its new management team will be formally inaugurated on Jan. 1. After that, Uchida will have the unenviable task of realigning and consolidating Nissan's keiretsu network with an unprecedented centrifugal force working against him.