KYOTO -- Japanese motor producer Nidec, whose rapid growth is almost synonymous with legendary founder Shigenobu Nagamori, has taken a first step toward a full leadership change by naming the long-reigning CEO's second in command.
Executive Vice President Hiroyuki Yoshimoto, 50, will be promoted to president in June, the Kyoto-based manufacturer said Thursday. He will be the first to take over the position held by Nagamori since the company's 1973 founding.
"I hope to work with him side by side, like partners in a three-legged race," the 73-year-old Nagamori told reporters, noting that his physical stamina is hitting its limits as the job requires worldwide travel. Having acquired many businesses abroad, Nidec now has group operations in 40-plus countries.
Nagamori will remain CEO and initially entrust about 30% of his work to Yoshimoto, with plans to gradually hand over more responsibilities so that Yoshimoto has a larger role in a few years. The duo will likely divide up visits to subsidiaries overseas, as well as efforts to consolidate acquired businesses.
The initial response of the stock market on Friday was lukewarm. Tokyo-listed Nidec shares closed at 15,935 yen, 3.4% lower than Thursday, while the benchmark Nikkei Stock Average gained 1.2% to 21,720.25. However, Nidec has gone up 0.8% since the beginning of the year, beating the index, which has fallen by 4.6%.
Yoshimoto caught Nagamori's eye with his success in turning around autoparts unit Nidec Tosok. Nagamori had said his successor should be someone as young as his own 46-year-old son. Yoshimoto falls into this age group.
His wealth of experience in the automotive field is also a valuable asset as Nidec has been shifting focus from hard-disk drives to such growth areas as autoparts.
Yoshimoto worked in automobile-related operations at trading house Nissho Iwai, now Sojitz, before moving on to autoparts maker Calsonic Kansei. He also oversaw the turnaround of Nissan Motor's Thai unit. Having rebuilt a string of operations plagued by weak earnings, he calls himself a "rehabilitation and reform agent."
"I feel great joy when the business turns around," he says.
Yoshimoto joined Nidec in 2015, drawn by Nagamori's management philosophy. To carry out his first task of rebuilding Nidec Tosok, he visited production facilities in Vietnam and worked with local employees to identify reasons for low operating rates and other issues by drawing up a chart detailing production processes.
He still calls overseas subsidiaries daily to discuss sales and other updates. His deep involvement amazes those around him. No one is more suited to carry out the thorough hands-on management Nagamori is known for.
But Yoshimoto will face the daunting challenge of working with such veteran top managers as founding member and Vice Chairman Hiroshi Kobe, who serves as chief sales officer, and Vice Chairman and Chief Technology Officer Mikio Katayama, a former president of Sharp. Nagamori's leadership has been a vital force in uniting this group of diverse talent.
Succession is considered one of the biggest risks for Nidec. Other major companies have struggled as well. Fast Retailing's Tadashi Yanai returned to the presidency in 2005 after his handpicked successor failed to satisfy his expectations for company performance. And at SoftBank Group, heir apparent Nikesh Arora left as Masayoshi Son decided to stay on.
Nagamori said it is his responsibility to ensure that Yoshimoto succeeds. Yoshimoto faces a critical test of his leadership as the company charges ahead with sales targets of 2 trillion yen ($18.7 billion) in fiscal 2020 and 10 trillion yen in fiscal 2030.