Japan’s faulty final inspections scandal, and Carlos Ghosn’s reaction, fueled his removal

November 24, 2018 06:01 CET

TOKYO — Japan’s ongoing scandal over faulty final vehicle inspections stood as a symbolic backdrop to Nissan’s ouster of Carlos Ghosn as chairman last week.

Ghosn’s detached disinterest in the crisis as it hammered Nissan’s image in the carmaker’s backyard apparently fueled resentment among top brass already disenchanted with him.

While executives at headquarters scrambled in July to address the latest outbreak of botched inspections, Ghosn blithely continued his family vacation on an island in western Japan, Japan’s Nikkei newspaper reported after Nissan said it would remove Ghosn as chairman for alleged financial offenses.

“He thinks he is not at all responsible. I wonder which company he represents as chairman,” the business daily quoted an unidentified Nissan executive as saying about the incident.

To outsiders, Japan’s uproar over inspections may seem overwrought. But as the protest over Ghosn’s response shows, the scandal triggers an outsized sense of transgression here.

In some cases, workers who lacked proper certification were doing things such as testing car dome lights to see whether they properly illuminate when the doors are opened.

Others were more significant: Workers who were certified nevertheless tweaked emissions data when the equipment wasn’t recalibrated between tests or when humidity levels were slightly outside the prescribed testing range. Or they fudged data on horn volume when it varied by 1 decibel. Or they stepped on the main brake when testing the parking brake, in violation of protocol.

These and many other questionable shortcuts — on factory floors at Nissan, Subaru and other automakers — have triggered mass outcry in Japan and the recall of 1.6 million vehicles.

Piling on

The scandal barely registers overseas because the problems pertain only to vehicles sold in Japan. But the morass is stretching into its second year as a drag on Japan Inc. — and still loomed large as automakers reported earnings this month.

The scandal emerged again as a sore point after Ghosn’s arrest and removal as chairman last week on unrelated accusations of financial wrongdoing.

The inspections provided ample fodder for local media to pile on to the disgraced Ghosn for falling asleep at the helm.

Among the attacks: Ghosn seemingly passed the buck on the inspection problems at June’s annual shareholder meeting by making Saikawa field all questions on the matter.

The embarrassing final inspection crisis has taken a life of its own for several reasons.

It is partly a turf war between hidebound carmakers content in their ways and Japan’s uncompromising regulator, the Ministry of Land, Infrastructure, Transport and Tourism.

It is partly cultural. In a country where rules are meant to be followed, the corner-cutting is an affront to Japan’s self-styled reputation as the world’s maestro of quality manufacturing.

Finally, it is partly political. When the problems came to light, Japan’s government had little choice but to come down hard on violations, no matter how trifling the rules may seem.

Short leash

Among the automakers touched by the scandal, Subaru and Nissan are on a short leash.

They are obliged to submit regular reports to the transportation ministry outlining their efforts to prevent repeat offenses.

The scandal grabs headlines here with the buzzword kanken, a contraction of the Japanese words for final inspection. And the shake-up has triggered soul searching throughout a nation that long prided itself on bulletproof quality.

Transport Minister Keiichi Ishii seemingly found new resolve for scrutinizing Nissan — and other automakers — after the arrest of Ghosn for alleged malfeasance.

Said Ishii: “I will call on Nissan to ensure that preventative measures are thoroughly implemented for the appropriate inspection of finished cars.”

You can reach Hans Greimel at hgreimel@crain.com. — Follow Hans on

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