Halting Zama; toward an “optimal-growth company” (1993)

Touching the sanctuary, but unable to change the framework

Halting vehicle production at Zama was the first time a top-tier maker touched the “sanctuary” of domestic employment, and its symbolism was large. President Tsuji summing up Nissan as “a company that fails to see things through,” and pushing into cutting waste and capacity, was a clear break from management that had taken expansion for granted. The sharpness of the problem analysis, and the resolve to shoulder a painful decision, can be seen as a starting point for the rebuild that would run through to Ghosn’s reforms.

Even so, this rebuild stayed inside the old framework of holding to a full lineup and depending on the keiretsu. Cut capacity alone without narrowing the lineup, and the weight of fixed costs remains. The method of filling the missing profit through cost reductions at the keiretsu drained the strength of parts makers that were independent companies and bred friction in the relationship. As a result the year ended March 1995 still could not stop the losses, and the drastic measures — capital tie-ups and a rethink of the keiretsu itself — were carried over to the hands of Renault and Carlos Ghosn, arriving in 1999. That touching the sanctuary was still not enough, in fact, widened the reach of the next decision.