Japanese billionaire Shigenobu Nagamori, founder and chairman of motor manufacturer Nidec, will leave retirement to return as the company’s CEO following a steep dive in its shares.
Nagamori, 77, will replace current CEO Jun Seki, who will be demoted to chief operating officer, Nidec announced on Thursday. The Kyoto-based motor maker saw its operating profit fall 16.8% to 36.9 billion yen (about $288 million) for the three months ended March 31, marking the second consecutive quarter of such declines. Nidec shares are down 35% so far this year.
“I looked at the stock price every day and thought this is impossible,” Nagamori told reporters and investors, according to local media. “It was so frustrating that I felt like throwing a rock and smashing the stock display board.” Nagamori is the largest shareholder of Nidec, which he founded in 1973. He was ranked No. 5 on the Japan Rich List with a net worth of $9 billion.
Despite a 2.9% increase in net sales in the past quarter, Nidec’s profits were hurt by shortages of commodities such as copper and disruptions to production in China, the company said. The citywide lockdown of Shanghai in March to staunch the spread of Covid-19 caused widespread supply-chain disruption.
In 2020, Nagamori appointed Seki, a longtime Nissan Motor executive, as president and COO based on his automotive, manufacturing and global experience. He was promoted to CEO a year later. Nagamori said the leadership change is temporary and expects Seki to be CEO again in three years.
Nidec bills itself as the world’s largest manufacturer of motors for hard-disk drives and optical drives, but in recent years has aligned with the global trend toward electric vehicles. Nagamori has said that his goal for Nidec is to hit 10 trillion yen ($80 billion) in revenue by 2030, on the back of Nidec’s aggressive push to produce EV parts that led shares to soar 150% in 2020.
The manufacturing company focuses on the e-axle, the “brain” of EVs that controls gear, motor and power-control electronics. Last year, Nidec bought Mitsubishi Heavy Industries Machine Tool for an undisclosed price to improve gear-making capabilities for e-axle transmissions. The company also has a joint venture with global auto-making giant Stellantis and aims to begin mass production of e-axles in the second half of 2022.
Born to a family of farmers, Nagamori studied engineering at Tokyo Polytechnic University. He founded Nidec with the belief that motors form “the central core of industry.” To date, Nagamori has donated at least 20 billion yen ($155 million) toward educational and healthcare initiatives across Japan, earning a spot on Forbes Asia’s 2019 Heroes of Philanthropy list.
“Instead of being delighted with the fat bank account that fate has given me, I’ve decided to use that money to help where there are true needs,” Nagamori said when announcing a donation in Muko, the city where he grew up.