Misconduct at Nidec: Nagamori-style Management Even Neglected Product Quality

Editorial

15:03 JST, May 28, 2026

Suspicions about quality irregularities have now come to light at major motor manufacturer Nidec Corp., after its accounting irregularities were uncovered.

How did the pressure exerted by Shigenobu Nagamori — the company’s founder and a renowned charismatic leader — contribute to these irregularities? The entire picture must be quickly made clear.

Nidec manufactures a wide variety of motors, ranging from small motors for personal computers and smartphones to large ones for use in factories. It is a global manufacturer that also boasts a highly competitive machine tools business.

An internal investigation into this matter has uncovered irregularities in motors for home appliances and parts for automobiles. It is nothing short of astonishing that a total of over 1,000 irregularities have been identified.

Nidec has set up an investigative committee composed of external experts. The company intends to complete the investigation by August.

The accounting irregularities uncovered last year occurred because profits were inflated under the intense pressure created by “Nagamori-ism,” which relentlessly pursued growth. The quality irregularities are also said to have stemmed from efforts to cut costs for the purpose of boosting profits. The root cause appears to be the same.

Over 90% of the cases reportedly involved changes to components or designs that were made without customer approval.

These irregularities were egregious. In some cases, inspection data was falsified, or a different production location was listed than what was actually on the site.

There are suspicions that these irregularities were rampant at Nidec’s headquarters and at many other locations, including multiple subsidiaries. What chain of command led to these irregularities? A thorough investigation, including whether any laws or regulations were violated, is imperative.

Nidec grew rapidly through aggressive mergers and acquisitions, reaching over ¥2 trillion in sales. It was regarded in the market as a blue-chip company with high growth and high profitability, and Nagamori made a name for himself as a charismatic leader.

Nagamori once supposedly said that “quality issues are directly linked to a company’s credibility.” If the company even neglected quality — the very essence of manufacturing — that is unforgivable.

Initially, despite a whistleblower report about the misconduct, management failed to conduct a company-wide investigation, which delayed identification of the problem. It must be said that the corporate governance structure could not keep pace with the company’s expansion through mergers and acquisitions.

In recent years in Japan, quality irregularities have come to light in many manufacturing sectors, such as the automobile and iron and steel industries. The Japanese economy’s competitiveness is supposed to be based on the strength of its manufacturing. If the root causes of quality irregularities cannot be eradicated forever, it will undermine confidence in Japan’s manufacturing sector as a whole.

Corporate executives must re-examine the situation in their companies, in order to thoroughly implement management practices that prevent quality irregularities.

(From The Yomiuri Shimbun, May 28, 2026)