Nissan Chief Says “Fire Me if I Don’t Deliver”
Grumpy shareholders say Nissan’s latest CEO isn’t moving fast enough to fix the company’s woes.
CEO Makoto Uchida promises a detailed turnaround plan by May. And if investors don’t like it? “Fire me immediately,” he suggests.
Designed to Last
Makoto Uchida (Image: Nissan)
Uchida, who has been on the job only since December, is Nissan’s third CEO in 12 months. He told a boisterous bunch of shareholders earlier today that Nissan is taking “fast” action now to slash costs, especially in North America.
But Uchida also pleaded for a bit of patience while his team finalizes a top-to-bottom restructuring plan focused on delivering long-term success. A big part of the challenge is to coordinate the plan with Nissan’s 43% owner, longtime alliance partner Renault.
The Japanese carmaker went into an existential nosedive at the end of 2018 after the arrest of Chairman Carlos Ghosn on multiple charges of self-serving financial misdeeds. Until then, Ghosn had lionized as the man who saved Nissan from bankruptcy 20 years ago.
Ghosn’s removal triggered an intense self-examination at Nissan. It wasn’t a pretty picture.
As in the 1990s, the company’s product lineup was losing its pizzazz. The corporate response seemed eerily familiar to what happened 25 years ago. Nissan was adding more model variants, expanding into new markets, hiking production and counting on costly discounts to flog sales.
That approach didn’t work in the late 1990s, and it wasn’t working now. Ghosn’s arrest focused the company’s attention on such neglected basics as management oversight and financial transparency.
It took Nissan virtually all of last year to fix those issues. But the repairs haven’t revived the company’s sales and financial performance.
Last week, Nissan reported enough bad financial news to make any investor swoon. The bottom line: Net earnings plummeted nearly 90% over the past nine months, capped in October-December by the company’s first quarterly net loss in nearly 10 years.
No wonder stockholders are grousing.
Nissan is on the right track. Its plan contains broad-brush elements that are similar to those used by Ghosn two decades ago. But there’s a very big difference.
Nissan is a far more complex carmaker that it was then. More important, its basic business functions are deeply entwined with those of alliance partner Renault.
The two companies share everything from product engineering and production facilities to purchasing and logistics.
The toughest challenge ahead for Uchida and his team is to fix the problems at Nissan without inflicting damage on Renault, or weakening their alliance.
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