Nissan CEO plans recovery through U.S. revival, cost control, fresh product
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December 02, 2019 05:44 AM

Nissan CEO plans recovery through U.S. revival, cost control and fresh product

Hans Greimel
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    Uchida: "Nissan has enjoyed growth over the years thanks to the alliance. I intend to continue our alliance efforts while maintaining Nissan’s independence."

    YOKOHAMA, Japan -- Nissan's new CEO, Makoto Uchida, outlined a plan of attack for rebuilding the troubled automaker by reviving its U.S. business, cracking down on costs and increasing revenue through fresh product and next-generation technologies.

    As for relations with estranged partner Renault, Uchida said he would focus on short-term gains that benefit all members of the Renault, Nissan, Mitsubishi alliance while protecting Nissan’s autonomy.

    "The alliance is critical to reach our goals," Uchida said. "We need to look at what worked within the alliance, and what didn’t, and decide how to go forward."

    In his first comments as CEO, Uchida also said: "Nissan has enjoyed growth over the years thanks to the alliance. I intend to continue our alliance efforts while maintaining Nissan’s independence."

    Uchida said he is not focused on changing the companies’ cross-shareholdings for now. "Closer capital ties with Renault are not a focus in the short term," Uchida told reporters at a press briefing on Monday.

    His comments were delivered at Nissan’s global headquarters and came day after he took office.

    Renault owns 43 percent of Nissan with voting rights, while Nissan has a 15 percent stake in Renault with no voting rights. Nissan also has a stake in Mitsubishi Motors. Renault has for years been pursuing closer ties with Nissan, its bigger partner, only to be rebuffed by Nissan.

    Uchida takes the helm at at a critical turning point as Nissan battles slumping profits, an aging product portfolio and soured relations with 20-year French partner Renault.

    Uchida is part of a younger generation of new leaders tapped to tackle those challenges and revive Japan’s No. 2 automaker from the scandal that enveloped it following last year’s stunning arrest of former Chairman Carlos Ghosn on financial misconduct allegations.

    He said Nissan must still reform parts of its corporate culture and blamed much of sales and profit trouble on the unrealistic goals set by Ghosn during his time at the helm.

    “By trying to hit over-ambitious goals, we caused a rapid decline in our performance,” Uchida said. “We have to set objectives that are challenging but achievable and understandable.”

    Joining the 53-year-old Uchida on Nissan’s new leadership team is just-appointed COO Ashwani Gupta, 49, a former executive with experience at Nissan, Renault and Mitsubishi Motors. Backing them is Vice COO Jun Seki, 58, in charge of performance recovery and product planning.

    Uchida replaced interim president Yasuhiro Yamauchi, who was selected in September to preside during the search for a successor to former CEO Hiroto Saikawa, who resigned that month.

    Nissan’s board says Uchida’s top priority is to resuscitate profits.

    He inherits a midterm revival plan from Saikawa.

    That roadmap that involves cutting 12,500 jobs worldwide, consolidating the lineup and cutting global production capacity to 6.6 million vehicles a year from 7.2 million. Saikawa’s plan also calls for rebuilding U.S. sales to 1.4 million vehicles in the fiscal year ending March 31, 2023.

    It targets parent company operating profit margin of 6 percent that year.

    Uchida said he would reexamine that plan with Gupta and Seki after they settle into their roles.

    He also said the U.S. recovery is making progress, without giving details.

    Uchida aims to control costs by streamlining investments and front-line operations. He plans to increase revenue by introducing new technologies and vehicles, such as a next-generation, full-electric crossover.

    “The most important pillar of the business transformation is growth through new products, new technologies,” he said. “I want our employees to feel proud that they work for Nissan.”

    Nissan’s operating profit fell 70 percent in the July-September quarter, following a 99 percent plunge in the April-June period. For the current fiscal year ending March 31, the company expects operating profit and net income to both fall by more than half.

    Operating profit margin is forecast to dwindle to 1.4 percent compared with the 2.7 percent to recorded in the previous fiscal year ended March 31.

    Another priority for Nissan and the alliance is streamlining r&d and product development.

    Japanese media reported on Dec. 1 that Renault, Nissan and Mitsubishi are in talks to set up joint venture dedicated to next-generation technologies, including electrified drivetrains and artificial intelligence. Executives from the companies discussed the idea last week in France.

    At the same meeting, the companies decided to create a new position of general secretary for the Alliance Operating Board. That person will report to the alliance board and the companies’ CEOs and be in charge of coordinating major alliance projects.

    “The board members all agreed on programs to significantly enhance and accelerate the operational efficiency of the alliance for the benefit of the three companies, including action plans to maximize the contribution of the Alliance to support each company’s strategic plan and operating profit,” the companies said in a statement.

    The secretary general will be named in the coming days, they said.

    French media reported that French-Lebanese engineer Hadi Zablit has been picked for the post. Zablit, 49, is currently the alliance's business development chief responsible for  the development of Common Module Family A-segment platform, new technologies partnerships, mobility services and product planning synchronization.

    Reuters and Bloomberg contributed to this report

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