Business / Corporate

Nidec's 70-year-old CEO plans to run company 15 more years

by Jason Clenfield and Masatsugu Horie

Bloomberg

Shigenobu Nagamori plans to lead Nidec Corp. until he hits his latest financial target, a 10-fold increase in revenue he expects by 2030. He’ll be 85 then.

One of Japan’s rare mergers and acquisitions specialists, Nagamori became a billionaire by cobbling together 41 companies to form the world’s biggest maker of precision motors used in hard disk drives, among myriad other products. Visitors to Nidec’s headquarters in Kyoto can see the wooden shed, preserved in the lobby, where Nagamori started the company next to his mother’s farmhouse in 1973.

“I’m joking when I say I’ll keep going until I’m 120, but I plan to keep doing it at least until we hit the target,” the 70-year-old said in an interview, dressed in a dark suit and his trademark DayGlo green necktie.

What becomes of Nidec without its founder is a concern for analysts and investors, who lay credit for its explosive growth almost entirely at Nagamori’s feet. Even the company’s own reports cite “dependence on Nagamori” as a business risk.

Planning a 10-fold sales increase might sound outlandish, if Nagamori hadn’t done it before, says George Chang, a Tokyo-based analyst at Macquarie Securities Ltd. When revenue was about ¥100 billion in 1998, Nagamori promised he’d get to ¥1 trillion in the next decade or so. The financial crisis slowed him down a bit, but last year he delivered.

The next target: ¥10 trillion. That would make Nidec one of Japan’s six biggest companies, larger than Sony Corp. or even Hitachi Ltd., the country’s largest private employer.

“People say it’s crazy to come up with these numbers, but there’s a track record,” Macquarie’s Chang said. “It’s a company that wants to grow. That’s the message Nagamori’s trying to send to investors.”

Nidec stock has climbed 59 percent in the last year through Thursday’s close, compared with a 40 percent increase for the Nikkei 225 stock average. Shares fell 1.7 percent to ¥9,131 as of 1:01 p.m. in Tokyo.

To get to the next big milestone, Nagamori said he would remake Nidec as a giant electronics conglomerate, supplying automotive parts and even consumer goods, along with its mainstay of motors. He said he could envision buying a company with sales of as much as ¥1 trillion, which would double current revenue in one fell swoop. So far Nagamori’s biggest deal has been for a company about one-tenth that size: the 2003 buyout of Sankyo Seiki Manufacturing Co., a Nagano-based maker of motors and industrial robots.

To help find a successor, Nagamori said he started an internal cram school this year to train top employees in his management approach, known as “Nagamorism.” Class will be held on weekends and Nagamori — who else? — will be the teacher.

Nagamori says he still works 16 hours a day, 365 days a year. To keep fit, he hits his home gym for 30 minutes every morning before heading into the office for a 6:50 a.m. start. He does another 30 minutes at night.

“The job takes me all over the world, so you have to stay strong,” Nagamori said.

Japan has the longest-living people on earth — Nagamori’s mother lived to be 94 — and the country’s postwar business leaders have a history of hanging on.

Industrialist Konosuke Matsushita led Panasonic Corp. until he was 79. And Fujio Mitarai, who will turn 80 in September, still serves as president, CEO and chairman of Canon Inc.

From his office on the 20th floor of Nidec’s headquarters, Nagamori can look down and see his mother’s grave. He reminisced about how tough she was on him, sending him out to fight again if he lost a scrap as a kid.

“When I get ready to go home at night, I can hear her voice behind me,” he said. ” ‘Heading home soon? Don’t you have more work to do?’ “