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HOME  > Past issues  > 2018 November 14 - 20  > Ghosn the 'Cost Cutter'
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2018 November 14 - 20 TOP3 [SOCIAL ISSUES]

Ghosn the 'Cost Cutter'

November 20, 2018
Nissan Chairman Carlos Ghosn, who was arrested on November 19 on suspicion of falsifying securities reports, has been nicknamed the "Cost Cutter".

His nickname originated from his scheme to shift managerial responsibility onto Nissan workers and Nissan subcontractors by carrying out massive layoffs, closing several factories, and discarding many subcontractors.

In 1999, for starters, Ghosn dismissed 21,000 workers, the largest-ever in Japanese corporate history, and shut down several factories. In 2009, using the previous year's global economic crisis as an excuse, he slashed 20,000 more jobs and abandoned even more subcontractors.

By replacing regular full-time employees with non-regular workers and by adopting non-regular employment even in the nerve center of Nissan's research and development division, the Ghosn-led auto giant increased revenues. However, under the pretext of the 2009 business slump, “Ghosn the Cost Cutter” simultaneously terminated the contracts of 3,000 dispatched engineers working at a technical center in Kanagawa Prefecture in addition to the aforementioned 20,000 job cuts.

Due to the outbreak of this "haken giri" (layoffs of temporary workers dispatched to Nissan by staffing agencies) and "hiseiki giri" (layoffs of non-regular workers), many workers were thrown out of Nissan dormitories. This became a big social concern at that time.

Each time he imposed the sacrifice on workers and subcontractors, Nissan improved its business performance. Accordingly, his compensation went up dramatically. However, many shareholders have been opposed to his astronomical compensation package.

Past related articles:
> Number of executives paid more than one hundred million yen hits record high under Abenomics [July 5, 2016]
> Pay gaps between company executives and workers growing [July 29, 2014]
> Nissan Motor pays only 10.9% in corporate taxes and not the 35% normally imposed [June 10, 2014]
> French union supports ex-Nissan non-regular workers’ lawsuit [January 17, 2014]
> Big companies make more profits and pay less tax [July 10, 2013]
> Dismissed workers demand regular employment [April 5, 2012]
> Non-regular workers sue Nissan over dismissals [May 13, 2009]
> Diet summons auto industry representative over dismissal of temp workers [February 25, 2009]

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