Antitrust Watchdog Warns Nissan For Underpaying Subcontractors

Japan's antitrust watchdog plans to warn major automaker Nissan Motor Co. for unilaterally reducing payments to over 30 subcontractors, a source familiar with the matter said, Kyodo News reported.

Nissan allegedly underpaid the companies by some 3 billion yen ($20 million) upon delivery of their services over an extended period. I Photo: Nissan

Nissan allegedly underpaid the companies by some 3 billion yen ($20 million) upon delivery of their services over an extended period, in violation of the subcontract law, the source said, with the Yokohama-based company admitting it was in the wrong.

Nissan's illegal cost-cutting could have taken place for decades, the source said, with subcontractors likely accepting it over fears they could lose business with the major automaker if they raised the issue.

The value of underpayments by Nissan is expected to be the largest of any company since the subcontract law took effect in 1956. The Japan Fair Trade Commission (JFTC) plans to issue an advisory to prevent a repeat of the situation, the source said.

A Nissan official admitted Monday the automaker has been probed by the watchdog, claiming it "has returned the entire sum" that had been deducted from subcontractors.

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