Scandal-hit Nissan suspends production for Japan market

Nissan Motors CEO Hiroto Saikawa bows during a press conference in Yokohama. Saikawa said that “those customers who trusted the measures that we took and purchased our vehicles, we violated their trust.” (AFP)
Updated 19 October 2017
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Scandal-hit Nissan suspends production for Japan market

YOKOHAMA, Japan: Nissan said Thursday it was suspending all production destined for the local market, as Japan’s number-two automaker grapples with a mounting inspection scandal that has already seen it recall some 1.2 million vehicles.
The announcement comes weeks after the company admitted that staff without proper authorization had conducted final inspections on some vehicles intended for the domestic market before they were shipped to dealers.
On Thursday, it said a third-party investigator found the misconduct had continued at three of its six Japanese plants even after it took steps to end the crisis, something its president blamed on “old habits.”
“You might say it would be easy to stop people who are not supposed to inspect from inspecting,” Nissan president Hiroto Saikawa told a press briefing Thursday.
“But we are having to take (new measures) in order to stop old habits that had been part of our routine operations at the factories.”
“What is necessary is to make our people realize that what they thought was OK was in fact bad.”
This month, Nissan said it was calling back around 1.2 million vehicles produced and sold in Japan between 2014 and 2017 for re-inspection, after government officials found some final inspections were being done by staff not certified to do them.
Nissan produced 1.015 million vehicles in Japan in its last fiscal year to March, with about 400,000 units sold locally.
“Those customers who trusted the measures that we took and purchased our vehicles, we violated their trust,” Saikawa said.
“This is a serious problem.”
Saikawa, who took over the top position from Carlos Ghosn earlier this year, has said the crisis was likely to cost the firm around ¥25 billion.
“We are trying to change what has become a part of a routine,” he told reporters, adding that the suspension would likely be in force for about two weeks.
He insisted that the issue did not affect the quality of Nissan’s vehicles.
“Rather than whether we are building good and safe vehicles, this is about whether steps that were supposed to be followed were followed,” he added.
Nissan’s original announcement in early October came just days before Japan’s Kobe Steel found itself embroiled in a scandal as it admitted to falsifying quality data in products shipped to about 500 clients — including Toyota and the country’s iconic bullet trains.
The back-to-back scandals tarnished Japan Inc’s reputation for quality and were the latest in a string of negative headlines for the country’s firms, once the envy of the world.
Airbag maker Takata went bankrupt this year after spending years dealing with defective products that were linked to 16 deaths and scores of injuries worldwide.
And Mitsubishi Motors last year admitted that it had been falsifying mileage tests for years.


Airbus sees regional demand for A220

Updated 2 min 48 sec ago
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Airbus sees regional demand for A220

  • Airbus acquired a majority stake in the C-Series program in October officially rebranding it in April to the A220
  • The US low-cost carrier JetBlue last week became the first purchaser of the aircraft since its rebrand

FARNBOROUGH: Airbus Chief Commercial Officer Eric Schulz has played up the prospects for the Bombardier C-Series aircraft in the Middle East and beyond, hoping carriers will use the single-aisle plane to expand routes.

The European plane maker acquired a majority stake in the C-Series program in October, officially rebranding it in April to the A220, strengthening its offering in the smaller jet sector in competition with arch-rival Boeing.

“Yes, I believe we’ll see orders in every region,” Schulz said when asked about the prospects for Middle Eastern orders for the plane.

“There are many people across the Middle East who are looking at the opportunity to integrate the A220 as a feeder to leverage their routes up to a point where maturity can be on with the single aisle.”

Schulz spoke to Arab News on the second day of the UK’s Farnborough International Airshow, which marked the rebranded A220’s first public appearance.

The US low-cost carrier JetBlue last week became the first purchaser of the aircraft since its rebrand, with an order for 60 of the single-aisle planes.

Airbus on Tuesday announced a commitment from what it described as “a new US airline startup” for 60 A220-300 aircraft, with deliveries due to begin in 2021.

The new airline is backed up by a group of experienced investors led by JetBlue founder David Neeleman, who is also an investor in TAP in Portugal and the controlling shareholder in Brazil’s Azul airlines.

The single-aisle market is expected to dominate commercial plane orders over the next 20 years, according to forecasts released by Boeing on Tuesday.

The US manufacturer expects demand for 31,360 single-aisle planes — representing nearly three quarters of total orders — over the period, an increase of 6.1 percent compared with similar forecasts published last year.

“This $3.5 trillion market is driven in large part by the continued growth of low-cost carriers, strong demand in emerging markets, and increasing replacement demand in markets such as China and Southeast Asia,” Boeing said.

In the face of such growth prospects, Boeing earlier this month agreed to takeover the commercial jetliner business of Brazil’s Embraer, a specialist in smaller passenger planes, in order to better compete better with Airbus in the segment.

Schulz downplayed suggestions of a downturn in orders from Middle East carriers, suggesting that any slowdown in orders from the region’s larger players would come alongside an uptick from other carriers.

“There might be a little bit of a slowdown for some airlines, and there is also some growth for others,” Schulz said.

“We are serving the market, and what we need to do is just continue to serve the market and take the opportunities and the challenges where they are and just deal with them.”

Schulz said that Airbus was “moving forward” with the details of its $16 billion A380 deal with Emirates struck in January.

The deal with the Dubai-based carrier for 36 additional superjumbo planes, the last major deal agreed by Schulz’s predecessor John Leahy, was seen as saving the beleaguered aircraft program, which has struggled to secure new orders.

“Clearly the relationship is fantastic,” Schulz said, having met with Emirates CEO Tim Clark on Monday.

“Clearly they have put a lot of emphasis on the opportunity that their A380 fleet is giving them. They need the plane, we need the plane to be delivered, and yes, it’s all aligned.”