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calsonic kansei

Home / Posts Tagged "calsonic kansei"

Tag: calsonic kansei

Calsonic Kansei – moving from “how” to “what”

American private equity companies such as Bain and KKR have been active in Japan recently, making me wonder whether the companies they acquire should no longer be classified as “Japanese”. Bain are about to take on WPP’s stake of Japanese ad agency ADK and led the consortium which acquired Toshiba’s chip business. KKR recently completed its acquisition of Calsonic Kansei from Nissan and two businesses from Hitachi (power tools and chip making).

The members of the Bain and KKR teams that undertook the acquisitions are mostly Japanese nationals, but a recent article 院Nikkei Business about how Calsonic Kansei is developing since the acquisition shows that they are trying to inject a more Anglo Saxon way of thinking.  When it was still under the Nissan umbrella, its main focus was how to respond to Nissan’s requests.  “Now, it is not ‘how’ but ‘what’ that is important ” says Kazuhiro Sato, in charge of product planning.

Calsonic Kansei is aiming to raise its non-Nissan customer base from 20% to 30% and is hoping to do this through developing new technologies for electric vehicles, such as air conditioning – building on its experience of developing components for Nissan’s Leaf.

Calsonic Kansei has also launched a cyber security subsidiary White Motion as a joint venture with French company Quarkslab.

Calsonic Kansei have around 2000 employees in Europe, the bulk of which are in the UK (making it #18 in our Top 30 Japanese UK employers), where there are two factories resulting from the acquisition of Llanelli Radiators in 1989 and Marley Foam in Sunderland – it also has factories in Romania and Spain.

Calsonic Kansei is the result of a domestic merger of Calsonic (air conditioning) and Kansei (display meters) in 2000, the year after Carlos Ghosn took over at Nissan and declared that only 4 of the 1394 companies that Nissan had shares in were “indispensable”.  Which the 4 companies were was not clear, but Calsonic and Kansei were not among them.

Calsonic Kansei fought back by adopting the “cockpit module” concept which had become popular in Europe, to the extent that they even installed production lines for it in Nissan factories.  Nissan then increased its share in Calsonic Kansei in 2005.

However Ghosn continued with his open procurement policy and it became clear to Calsonic Kansei too that becoming too dependent on one customer was not healthy or conducive to high growth.  When the capital alliance with Mitsubishi Motors was formed in 2016, Ghosn also talked to Roberts and Kravitz at KKR about selling Nissan’s share in Calsonic Kansei.

Calsonic Kansei might still be swallowed up in further industry restructuring.  It is several orders of magnitude smaller than giants such as Bosch or Denso.

Calsonic Kansei’s president Hiroshi Moriya says although there was anxiety at first when KKR became the new owners, since then as sales to Nissan have not decreased and KKR is helping the company to find new people to build relations with overseas customers, employee motivation has improved and they are looking for new ways to revitalize the organisation, such as joint project teams between Japanese and non-Japanese engineers.  “It is important not to fear failure and to be ambitious.  What is important is speed.  I keep telling everyone in the company that mistakes can be fixed.”

 

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Why work for a Japanese company? (#1) Corporate Social Responsibility

For most Japanese companies, despite recent changes to corporate governance and the occasional scandal, the main motivation is the long term survival of the firm, not shareholder value maximisation.

Obviously you have to make some money to invest back into the company to survive, but above all longevity means being a good citizen in the environment and communities you operate in. There are some exceptions to this of course, but by and large, Japanese companies are pretty sincere about corporate social responsibility, to the point where I used to joke when I worked in corporate communications in a Japanese IT company, that if we didn’t watch out, our mission statement would be identical to every other Japanese technology company’s mission statement as it could be summarised as “contributing to society through innovation”.

So if you are looking to work for a company that will be supportive of your wish to make a positive contribution to society, then you may find Japanese companies congenial places to work.

Some are more active in CSR than others, so when Toyo Keizai has published its latest rankings by industry, we matched these to our Top 30 Europe, UK and Germany largest Japanese employers rankings and put them in rank order as below.

As Toyo Keizai points out, it is easier for manufacturers to score highly in their CSR rankings, which is why they dominate the top 50 overall, and also why Toyo Keizai publishes rankings by industry, to ensure like for like comparisons are made.  Banking and financial services are not included in their analysis. Toyo Keizai explains its scoring system (in Japanese) here.  It has around 150 criteria, across the categories of diversity (gender, age, disability), environment, corporate governance and social contribution.

  • Fujifilm – #1 overall and #1 in pulp/paper/chemicals
  • Canon #4 overall and #1 in electronics and fine engineering
  • Denso #8 overall and #1 in automotive
  • Ricoh #9 overall and #3 in electronics and fine engineering
  • Konica Minolta #12 overall and #4 in electronics and fine engineering
  • Honda #14 overall and #2 in automotive
  • Nissan #17 overall and #3 in automotive
  • Daiichi Sankyo #25 overall and #1 in pharmaceuticals
  • Toyota #28 overall and #4 in automotive
  • Fujitsu #30 overall and #9 in electronics and fine engineering
  • Astellas #34 overall and #2 in pharmaceuticals
  • Sumitomo Rubber 36th overall and #2 in oil/rubber/glass/ceramics
  • Mitsubishi Corporation #42 overall and #1 among trading companies
  • Lixil 44th overall and #1 in metal products
  • Sony #45 overall and #12 in electronics and fine engineering
  • Nidec #49 overall and #13 in electronics and fine engineering
  • Takeda #50 overall and #4 in pharmaceuticals
  • Sumitomo Electric Industries #52 overall and #2 in metal products
  • Itochu #55 overall and #2 among trading companies
  • Panasonic #57 overall and #15 in electronics and fine engineering
  • NYK #58 overall and #1 in logistics
  • Japan Tobacco 60th overall, 3rd amongst food companies
  • Brother Industries #71 overall and #16 in electronics and fine engineering
  • Sumitomo Corporation – #73 overall and #3 amongst trading companies
  • NTT Data #75 overall and #4 in telecommunications
  • Olympus #84 overall and #17 in electronics and fine engineering
  • Dentsu #95 overall and #2 out of service sector companies
  • Sumitomo Heavy Industries #138 overall and #11 amongst machinery companies
  • Calsonic Kansei #138 overall and #18 in automotive
  • Fast Retailing (Uniqlo) #531 overall and #19 out of 20 amongst retailers

 

 

 

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Japanese automotive companies represent 1/3 of top 30 Japanese employers in the UK

Fujitsu continues to be the largest Japanese employer in the UK despite recent restructuring.  We’ve added Sumitomo Rubber to the list, following its recent acquisition of UK tyre wholesaler and retailer Micheldever.  Along with Kwik Fit, another UK tyre dealer and car servicing company is owned by Itochu at #3, this means that over a third of the companies in the list are automotive or have a substantial automotive component to their business.

We’ve also revised upwards our estimate of the total number of Mitsubishi Corporation employees, having confirmed from various sources that its main subsidiary in the UK, Princes, the foods company, has around 3000 of its 8000 employees in its UK operations.

The top 30 now cover around 80,000 of the 140,000 employees that Japanese companies in the UK employ.  Individual profiles of each company, including trends in employment, regional headquarters, European organisation and CSR and diversity analyses are available – please contact pernilledotrudlinatrudlinconsultingdotcom

Rank Company UK employees 2016
1 Fujitsu 9,905
2 Nissan 7,657
3 Itochu 6,697
4 Honda 4,565
5 Ricoh 3,702
6 Mitsubishi Corp 3,482
7 Hitachi 3,317
8 Toyota 3,233
9 Sony 2,937
10 Canon 2,744
11 Dentsu 2,571
12 Nomura 2,468
13 NSG 2,167
14 Mitsubishi UFJ Financial Goup 2,100
15 Denso 1,925
16 NYK Group 1,919
17 Mitsui Sumitomo & Aioi Nissay Dowa 1,867
18 Yazaki 1,846
19 Calsonic Kansei 1,729
20 SoftBank 1,700
21 Sumitomo Rubber 1,574
22 JT Group 1,473
23 Sumitomo Corporation 1,366
24 Fujifilm Holdings 1,292
25 Brother Industries 1,174
26 Olympus 1,157
27 Fast Retailing 1,100
28 Unipres 1,095
29 Konica Minolta 1,055
30 NSK 866
TOTAL 80,683

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Why Nissan matters more to the UK than the UK matters to Nissan
Nissan Ambassador Max Whitlock receives his gold all-electric Nissan LEAF to celebrate his double gold medal success at the Rio 2016 Games.

Nissan Ambassador Max Whitlock receives his gold all-electric Nissan LEAF to celebrate his double gold medal success at the Rio 2016 Games.

It will be interesting to see how far Ghosn’s well documented ruthlessness and unsentimentality which he demonstrated in turning around Nissan in Japan will come to the fore in next month’s decision about where to invest for the new Qashqai, because really, to Nissan, the UK is not as important as a market or a manufacturing base as the UK might like to think.  Plus, Ghosn has now got Mitsubishi Motors to worry about as well.

Here’s some figures to illustrate:

  • UK based employees represent around 5% of Nissan’s global workforce
  • UK based production represents around 10% of Nissan’s global production and around 70% of its European production (the rest is manufactured in Spain and Russia).
  • Car sales in the UK market represent around 3% of Nissan’s total units sold worldwide. Europe & Russia represent around 15% of total units sold.  So the UK market is about 20% of Nissan’s Europe & Russia regional sales.

From the UK perspective:

  • Nissan is the third largest Japanese employer in the UK, with around 8000 employees – not only in the Sunderland factory but also several hundred working in design at Nissan Technical Centre Europe in Cranfield (ultimately registered in Belgium so that should make a quick getaway easier) and a design centre in London
  • Nissan is the 8th largest Japanese employer in Europe – around 16,000 employees in total – so around half are in the UK.  However the European regional headquarters is in Switzerland, to which the UK factory sells all its production. The operational headquarters and holding company for the rest of Europe is based in France.
  • Nissan Sunderland’s plant accounts for nearly 1/3 of the UK’s car production.  80% of it is ultimately exported, 76% to Europe.

And of course there’s the supply chain and the jobs it provides – the UK car industry likes to say it supports around 800,000 jobs.

Calsonic Kansei is a supplier to Nissan, and is also in our Top 30 Japanese companies in the UK, employing over 1300 people – with factories in Llanelli and Sunderland – and Spain.  Nissan has a substantial stake in Calsonic Kansei, but the cosy mutually supportive supply chains of 20 years’ ago have long disappeared, thanks in part to Ghosn.  So it’s not hard to see Calsonic Kansei and others responding as quickly as they can to any shifts in location of demand.

It’s legendary in Japan that when a Nissan employee went to Ghosn to beg him not to axe one of the suppliers totally dependent on Nissan because it was headed up by a member of their own family, Ghosn responded “which is it to be?  That Nissan collapses or your uncle’s company collapses?”

For how complex and tough life is these days in the global automotive supply chain, this comment in the Financial Times recently was very revealing:

“We manufacture part of one component for the Nissan Qashqai. We purchase raw materials from Taiwan, we manufacture in the UK in a Japanese owned factory. Our customer is in Germany, where our product is bonded together with products from other countries. Our customer’s customer is in France, where the bonded component is integrated into a car component. The component is shipped to Sunderland and becomes a part of a “British” car.

How Mrs May and her merry band are going to sort this mess out is beyond me, and I suspect beyond them.

The development time lines for the most basic of automotive components is two to three years, which means that we are already “post Brexit” for new business development. How do I persuade customers to invest in new product development with us when nobody has a clue on what basis I might sell eventually sell my product to them, and given rules of origin, in some cases on what basis they might sell their product to their customer. We have good relationships with our customers, but at the end of the day they are running their business for their benefit and may well decide its just not worth the uncertainty and risk.”

Carlos Ghosn is “reassured” by Theresa May saying that the British government would be “extremely cautious” in maintaining  Nissan’s Sunderland UK factory’s competitiveness.  But he may nonetheless think some rebalancing is in order.

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Last updated by Pernille Rudlin at 2020-01-29.

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