Special Feature 2022 - Integrated Report 2022

Management Message

Message from the Chairman

Aiming to become a global company that continues to grow for the next 100 years and beyond

Nidec’s Tasks

Starting from a small prefab hut, Nidec has grown into a company that recorded consolidated net sales of 1,918.2 billion yen with an operating profit of 170.4 billion yen in FY2021. The number of our colleagues has increased to a total of 114,371 in the entire group. I appreciate that it is the passion, enthusiasm and tenacity of all the Group’s employees that made such growth possible. In 2023, Nidec will celebrate its 50th anniversary. As announced in the new medium-term strategy goal Vision 2025, we aim to increase net sales to over 10 trillion yen in FY2030 through organic growth centered on growth fields in existing businesses and new M&A deals.
 While aggressively aiming at further growth, I understand that the environment surrounding our businesses are becoming more and more severe. Various problems that affect our management decisions, such as the prolonged impact of the spread of COVID-19, soaring raw material prices, and an escalating energy crisis, have emerged. To overcome these problems, in addition to the ability to calmly analyze the international situation, I think it is most important that all the employees return to the starting point of Nidec and have a determination to “tackle challenges and do what others think they cannot do.”
 Now, our internal issues are becoming apparent. In particular, finding the right personnel who will lead Nidec in the future in cooperation with all Nidec members is a crucial task for us.

Ensuring Awareness of Our Corporate Culture

To try to find my successor, I have brought in a variety of people over the past several years. All of those who came to us had excellent talent. However, I could not find the one who would succeed me and lead Nidec, because none of them seemed to truly understand and absorb Nidec’s unique corporate culture, as represented by the attitudes of “Do it now, do it without hesitation; do it until completed,” “Passion, enthusiasm and tenacity,” and “Working hard and smart.” For about 50 years since its foundation, Nidec has achieved growth thanks to this corporate culture. It is no exaggeration to say that this corporate culture is Nidec’s deeply rooted DNA. I overlooked the key point that Nidec’s future should be entrusted to someone who, above all else, embodies this corporate culture.
 What we need more than anything else at the moment is to ensure that all the Group’s employees are fully aware of our corporate culture. Once again, we will work to instill in all Nidec members, from management executives to front-line employees, the spirit that forms our core, and reinforce the environment where they engage in any business with the pursuit of being No. 1 and speed.

Realizing the Vision

On September 2, 2022, Mr. Kobe was appointed President with approval of the Board of Directors. He has been my most trusted partner since the founding of Nidec. However, I do not intend to continue the management structure led by me and Mr. Kobe. For the moment, five Vice Presidents are scheduled to be appointed in April 2023, and a year later, one of them will be appointed as President after a formal consultation. The new President will spend about four years thoroughly learning Nidec’s management style before becoming the new Chairman.
 Our reform is not just about the business management system. To achieve our goal of becoming “a global company that continues to grow for the next 100 years and beyond,” we must not hesitate to implement reforms in various fields, including development, procurement, manufacturing and control. Various reform initiatives that will dramatically change Nidec, such as the ESG materiality actions and the establishment of the Sustainability Committee, are already steadily under way. While maintaining our corporate culture, which gives us a competitive advantage, we will boldly advance the necessary reforms to achieve the Vision.

November 2022

Shigenobu Nagamori
Founder, Representative Director and Chairman
(Chief Executive Officer)

Message from the President

Work together as “One Nidec” to become a truly global company

On Assuming the Position of COO

I was appointed Representative Director and President on September 2, 2022. I feel myself straightening up as our 50th anniversary is approaching.
 Our lifestyles are changing exponentially. In response to the macro-level changes, such as worsening environmental problems and declining working-age population, the shift to environment-friendly means of transportation and digital transformation have been advancing. As the forms of communication among people will become more diversified, I believe that business opportunities will emerge in totally new fields, such as those represented by the development of virtual reality (metaverse). What is important here is the reform of human resources and organizations. The reform in human resources will be promoted by pursuing “proactive, professional and productive” work styles. In the aspect of organizations, I think it is necessary to establish a system to support such human resources.

Business Strategies for FY2022

Our EV traction motor system “E-Axle” has been making great progress. As of the first quarter of FY2022, we have received orders for over 4 million units of E-Axle for FY2025. Along with the declining prices of EVs, both the number of orders and sales volume are expected to continue to increase. In September 2022, we started mass production of the second-generation model, which has achieved a 20% size reduction and 30% cost reduction from the first-generation model. Development of the third and fourth-generation models is also underway. In preparation for the expected increase in demand, we are also working to expand our global production capacity.
 Regarding M&A, a major move was the acquisition of Nidec Machine Tool Corporation and Nidec OKK Corporation to develop our machine tool business. Initially, the purpose of the acquisition of these two companies was to facilitate in-house production of key parts of E-Axle. Now, we have shifted the strategy to expanding the product lineup through the development of the machine tool business itself, thereby increasing profits.
 The business environment surrounding us is continuing to be severe with factors such as signs of a slowdown in the global economy as a whole, as well as declining demand for PCs and HDDs in the Small Precision Motors segment, delays in recovery of global production volume in the Automotive Products segment, and the peaking out of demand for home appliances in the Appliances, Commercial and Industrial Products segment. However, we will not use external circumstances as an excuse but tirelessly take the necessary actions.

Sustainability Management

In FY2022, we set up a Sustainability Committee inside the Board of Directors. All five members of the Committee are members of the Board of Directors. I myself am one of the members. I will fulfill my responsibility as a member in the efforts of backcasting from the vision of “a global company that continues to grow for the next 100 years and beyond” to see our present status, and ensure that the necessary actions will be taken.
 We will also continue to promote ongoing initiatives. For example, from the environmental aspect, to achieve the goal of carbon neutrality in FY2040, we have been promoting the introduction of renewable energy at our business sites. From the social aspect, we have been advancing reform in our human resources development and personnel system focusing on our corporate culture.

Renaming the Company

On April 1, 2023, the day marking our 50th anniversary, our company name in Japanese will be changed. To establish a new collective leadership system and become a 10 trillion yen company, and then to continue to grow for the next 100 years and beyond, I think all of the Nidec Group employees working in 43 countries around the world should take this opportunity to have active communication across the borders of countries and regions.
 During the last fiscal year, I met over 300 employees in person to have discussions on the importance of understanding our corporate culture and the founder’s spirit. We will continue to implement these initiatives to lay the groundwork for becoming a truly global company.

November 2022

Hiroshi Kobe
Representative Director and President
(Chief Operating Officer)

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