AS expected, the glitz and glitter of vehicle launches, concept cars and eye-popping displays at this year’s Tokyo Motor Show 2011, which was held early this month at the Tokyo Big Sight in Japan, were the sources of many stories that saw print in many broadsheets and magazines all over the world. However, the most awe-inspiring tale was actually the astounding recovery achieved by the Japanese automotive industry after going through what could well be the most challenging year in its history.
Many will remember 2011 as the year when Japan was struck by an earthquake and tsunami that resulted in massive damage to infrastructure, loss of lives and a radiation leak from a damaged nuclear reactor.
The series of events began at 2:46 p.m. on March 11, when a 9.0-magnitude earthquake off the coast of eastern Japan ravaged the island of Honshu and triggered a tsunami that leveled most of Sendai City and damaged the Fukushima I Nuclear Power Plant, resulting in a meltdown. Roads, railways, residential and commercial areas including a dam were left in ruin and close to 24,000 lives were lost in what many are now calling Japan’s Twin Disasters of 2011.
According to the World Bank, the estimated economic cost of the Twin Disasters was $235 billion. It is, thus, not difficult to imagine why the incidents brought the entire country to its knees.
Perhaps, one of the if not the most affected Japanese businesses was the automotive industry.
In the weeks and months that followed the Twin Disasters, Japan’s carmakers were forced to shut down their operations as a result of the loss of electricity in the Tohoku area where component manufacturers were located and the subsequent disruption in the spare parts supply line. The production stoppage sent ripples throughout their networks across the globe and, as if rubbing more salt in the Japanese car industry’s wound, nature dealt it another blow in September when flooding in Thailand literally placed many of the parts and assembly plants underwater, further curtailing global production.
Throughout it all, one carmaker showed how courage, focus and unity can play a big role in getting back on track despite staggering odds—Nissan.
To put things in the right perspective, Nissan had its own share of personal and corporate losses. It was reported that five of its employees and 17 members of their families were lost in the first few hours of the Twin Disasters. Both its Iwaki engine plant and Tochigi assembly plant ceased their operations after sustaining considerable damage.
While its fellow carmakers were still assessing the effects of the destruction and trying to regroup, Nissan’s CEO Carlos Ghosn traveled to Iwaki, where he personally surveyed the damage and immediately called Nissan’s key executives together to lay out plans to mitigate the crisis and implement the company’s recovery.
With a firm, cohesive resolve, the entire organization from the chief executive down to the ranks carried out the plans and, in less than six weeks after the twin disasters, both the Iwaki and Tochigi plants were back in action.
When the flooding in Bangkok threatened Nissan’s parts supply base, management quickly established protocols in its Smut Prakan plant to minimize its vulnerability to flood waters. Although the flood did not reach its plant, Nissan’s suppliers faced difficulty in transporting materiel, which was rapidly addressed thanks to planning and working closely with Nissan to find solutions.
As fate would have it, Nissan was back in full production by September.
Nissan’s chief operating officer, Toshiyuki Shiga, pointed out what made it all possible. “The most important thing we did was, before making excuses we did something about the problem using the united effort of our employees. They truly worked hard to solve our difficulties one by one. We overcame the crisis through strong action,” Shiga stated.
When asked what lessons Nissan learned from the entire episode, Shiga said: “Three things: prepare, take quick action—no excuses, and remember the experience and learn from it.”
Ghosn also shared his retrospection. “There’s no room for complacency because you’ll never know when the next disaster will come. Thanks to the resiliency of our employees and the Japanese people, we got out of it quickly.”
He added, “These crises are imposed on us. Today we are facing a depression in the global markets, an appreciation of the Japanese currency which is hurting our exports and, at the same time, domestic sales are low—things that we never expected. I am not worried because for as long as the company is in good shape—no debt and ready to adapt—we can face any challenge. Nissan will do well next year despite any adversity because we are entering the year with strong orders and we have good momentum.”
With the year coming to an end and as we look back at the recent tragedy brought upon our brothers and sisters in Cagayan de Oro and Iligan by Typhoon Sendong, we can remember the example of Nissan and the Japanese people for ideas and inspiration.
This space calls on all its readers to do what they can to rebuild the lives of those who have lost loved ones and property. Now is NOT the time for fixing the blame. Now is the time for unity, courage, compassion, quick action and hope. Most of all, let us remember all that has happened so that we can be better prepared in the future.
In Photo: Toshiyuka Shiga, Nissan Motor Ltd. chief operating officer.
