Nissan Motor managers were told by CEO Makoto Uchida in an October online meeting that the company was in a worse financial situation than expected, with weak sales and profitability in North America and China. The 58-year-old chief executive described a deteriorating financial situation, which has led to the company cutting 9,000 employees, 20% of global production capacity, and $2.6 billion of costs.
Uchida has been under pressure to deliver a turnaround and has promised to forfeit half his pay. Activist shareholders have quietly built up stakes in the automaker, and the incoming U.S. president, Donald Trump, has promised to impose 25% across-the-board tariffs on Mexico, a vital, low-cost production hub for Nissan.
The company has struggled to reverse the decline sparked by the 2018 arrest of its former chairman, Carlos Ghosn, on allegations of financial misconduct. Ghosn, who fled Japan a year later, remains a fugitive in his native Lebanon and denies the charges.
Nissan’s woes have been exacerbated by the company’s failure to offer gasoline-electric hybrids in the U.S., where customers are now clamoring to buy them. The company also didn’t hedge its bet on EVs by making hybrids available in the U.S., its biggest market, as it had done for years in Japan.
The next few months will be critical for Uchida and for Nissan’s future, as the company faces the prospect of further job cuts and plant closures. Activist investors are circling, and the company is looking for a long-term investor and wouldn’t rule out a partnership with Honda.
Uchida has given every sign that he intends to stay on as CEO, saying “I am determined and committed to fulfill my duty as CEO.” However, some analysts believe that the company needs new management to turn things around.
“Nissan’s current management has failed to respond to the changing business environment and has not done what they needed to,” said Seiji Sugiura, senior analyst at Tokai Tokyo Intelligence Laboratory. “What Mr. Uchida has to do now is hand the baton over to a new management team.”