BigMotor CEO Kaneshige Hiroyuki faced sharp questioning from reporters last week over the massive financial scandal at his company. But he only got visibly emotional once…when he accused his company’s employees of besmirching the good name of golf.
A mountain of fraud
BigMotor is a used car dealership chain in Japan. Founded in 1978 by former (we’ll get to that) CEO Kaneshige Hiroyuki, the company has over three dealerships and employs 6,000 people across Japan.
However, the company has gone overnight from a business success story to a scandal-plagued mess. In May, the magazine Friday reported that employees at BigMotor were purposefully damaging cars and sending inflated claims to insurance companies.
Friday’s report led to an investigation by an independent third party. In July, the committee announced that it had discovered 1,275 instances of fraudulent claims. The claims totaled 15.1% of all claims from November 22 to now and account for some 49.95 million yen (USD $351,000) in illicit fees.
One way employees damaged cars was by placing golf balls in a sock and pounding car bodies with them. Remember that detail, as it’s going to become very relevant very shortly.
Employees under pressure
Why would employees do this? According to ITMedia, employees at the company faced strict monthly repair quotas on purchased used cars. The company expected each car to bring in around 140,000 yen (USD $984) gross profit on body and paint repairs.
Employees have also told the reporters that BigMotor maintained a strict company culture in which the orders of superiors “couldn’t be contradicted”. Company culture positioned closing 100% of in-progress contracts as “normal”.
Employees were also forbidden from offering discounts to customers without permission from their superiors. And even if they did get permission, the company brass would scold them for it later. One employee said they ended up paying for a 10,000 yen (USD $70.29) discount out of their own paycheck.
The pressure, at times, led to outright abuse. A series of text messages that employees leaked to the press shows the abuse that store managers and others suffered from corporate. Supervisors would casually yell at employees in corporate LINE chats and hurl insults at them.
“A blasphemy to golf”
In response to the allegations, CEO Kaneshige Hiroyuki held a press conference last week where he ostensibly took responsibility by resigning. However, the rest of the press conference did little to impress anyone who was watching.
Kaneshige repeatedly denied that the fraud at BigMotor was “organizational”, instead opting to throw the employees in the body shop and paint divisions of the company under the bus. He insisted that he was “shocked” when he heard about the abuses for “the first time”. He maintained that the repair targets for employees were “goals” that had somehow gotten twisted into quotas.
For the most part, commentators have lambasted Kaneshige for what they say was a self-serving press conference in which he eschewed any personal responsibility. But it was his animated comments about employees using golf balls that drew press attention. Speaking with obvious anger, Kaneshige said:
It’s such blasphemy towards people who love golf.
“Isn’t it blasphemy to people who love cars?”
The comment didn’t go over well in either the press or online, where users lambasted Kaneshige for the weird aside. “That has nothing to do with the victims,” said one. Another wrote, “Isn’t it blasphemy to people who love cars?”
Not many people are buying that Kaneshige had nothing to do with the culture that created the scandal at his company. Indeed, he seemed to set the tone for the culture with a line in the employee guidelines that says that managers who are responsible for implementing the CEO’s vision have “the power of life and death” (生殺与奪権; seisatsu yodatsu-ken) over employees. (The company redacted that line shortly after the press discovered it.)
Sompo Japan, one of the largest insurers that work with BigMotor, announced this week they’ve dropped their contract with the company. And Japan’s Ministry of Transportation launched an on-site investigation of 34 locations.
So Kaneshige is out of a job – but time will tell if he remains out of the clink. And it’s unlikely his sympathy for golf-lovers will save him.
What to read next
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