Nissan's new man for all regions

YOKOHAMA, Japan — Makoto Uchida, the newly appointed CEO charged with forging "a new Nissan," brings with him a reputation for doing what makes sense and what makes money.

His willingness to say "no" — his fans call it just being realistic — may be what it takes to lead Nissan out of its current troubles.

Last year, when the longtime purchasing executive was promoted to president of Nissan's Chinese automaking joint venture, Dongfeng Motor Co., he immediately found the unit locked in a corporate stalemate.

Nissan headquarters had decreed that its Chinese-market vehicles must follow Nissan's global standards on vehicle connectivity technology. The local staff argued that China's domestic connectivity tech was more advanced and — despite the corporate desire for global standardization — the company should move in that direction for China.

Uchida studied the matter and concluded that his local team was right: Headquarters was wrong.

"Once he was convinced of that, he went to war with the Japan side to make sure they understand what we need and why we need it, but was able to give us the resources to do things in a very different way," said an associate who works with Uchida in China.

"He's not going to submit to the Nissan headquarters machine," the associate said. "He always says the regions deliver the results and headquarters should support the regions. He has the strength and experience to try something different. He is going to be a very different type of CEO."

The glimpse of Uchida in action may signal what's in store for a struggling Nissan and its businesses in North America, South America, Europe and elsewhere. Insiders say Uchida, a theology student in his younger days, is a pragmatic stickler for profitability who is leery of lofty numerical targets and ready to rock the boat for regional independence from headquarters.

That has been a trouble area for Nissan in recent years. Under the powerful, visionary leader Carlos Ghosn for 19 years, and even under his short-termed successor, Hiroto Saikawa, local markets did what they were told. Nissan's biggest market — the United States — pursued and even achieved an aggressive market share goal set by the home office. In addition to being costly, the exercise soured many retailers and managers on the company.

Last week, Nissan named Uchida as part of a trio of lesser-known executives to bring about what Nissan board Chairman Yasushi Kimura called "a new Nissan."

Uchida, 53, along with newly named COO Ashwani Gupta, 49, and vice COO Jun Seki, 58, will make up a management team that is younger, internationally minded and newly committed to working with Nissan's French partner Renault. And maybe more important, a year after Ghosn's controversial arrest and the ensuing implosion of Nissan's executive ranks, it is a team untainted by scandal.

Uchida's first test might be to once again balk at home office expectations.

The new CEO inherits a midterm plan created by Saikawa before he resigned as CEO last month. But last week, Kimura made it clear that the new team has free rein to chart its own recovery course for the troubled carmaker. Some directors think an all-new midterm business plan is needed, said a person familiar with the board's thinking.

"The new CEO may have to develop a new plan because the current one may no longer hold," the person said. "A review of that will be one of the first questions that will be asked of them."

Indeed, Uchida and Gupta were specifically picked in large part to make a fresh start, to break from a year marred by former Chairman Ghosn's arrest on charges of financial misconduct and Saikawa's sudden departure under the cloud of his own pay scandal.

"We selected people who could represent a new Nissan in a strong way," Kimura said.

Critics say not being able to say "no" to HQ is what landed Nissan in its current financial troubles, marked by profit-draining incentives and fleet sales that ultimately undercut global earnings. The whiplash in North America resulted in a squeeze that virtually wiped out corporate profits in the most recent quarter.

In China, Uchida also pushed back on electric-vehicle sales goals sent from Yokohama, which locals in China knew were unrealistic.

"We all knew it was not executable," the China associate said of meeting the sales goal from HQ. "Or if we did, we'd have to sacrifice a lot of profitability. He convinced the company to move back the electrification market share in order for us to focus on profitable, sustainable growth."

Masakazu Toyoda, the director in charge of Nissan's nomination committee, said of the work ahead, "The most important thing for the company is the recovery plan. Performance recovery should be completed, and this is the biggest challenge that we are addressing."

The road map laid out by Saikawa in May calls for trimming the vehicle lineup, cutting capacity and slashing thousands of jobs in an effort to reverse imploding profits over the next four years.

It also aims to restore parent company operating profit margin to 6 percent in the fiscal year ending March 31, 2023. It languished at 0.1 percent in the quarter ended June 30.

But it could be a while before Uchida and Gupta make any course corrections. They will take their new posts no later than Jan. 1. Interim CEO Yasuhiro Yamauchi continues until the handover.

They will need time to reassess the situation.

Both men break with traditional Japanese corporate culture in notable ways. They are relatively young, internationally minded, and both are midcareer transfers into the company — not lifers recruited straight out of college. Uchida joined in 2003 and Gupta, a former Honda executive in India, in 2006.

Crucially, both bring a working knowledge of Nissan's estranged alliance partner Renault.

Uchida was corporate vice president for alliance purchasing and also did a stint at Renault Samsung Motors, the French automaker's South Korean unit.

Gupta, a native of India, joined the alliance as a general manager of purchasing for Renault in India and was global head of the alliance's joint light commercial vehicle business. Gupta is COO of Mitsubishi Motor Corp., the third major partner in the Renault-Nissan alliance.

Gupta was dispatched to Mitsubishi only this year, replacing Trevor Mann, another former Nissan executive who left the company in the wake of the Ghosn upheaval.

Adding a thread of continuity to Nissan's top brass will be Vice COO Seki.

Seki was also a chairman of Nissan's China operations before being tapped by Saikawa this year as the top officer in charge of performance recovery.

Among the triumvirate, Seki has the deepest Nissan roots.

The three leaders face a daunting to-do list. They must reboot imploding profits, rebuild frayed relations with Renault, which is undergoing its own challenges, and revive Nissan's flailing business in the United States.

Critically, neither Uchida nor Gupta have ever had a posting to Nissan's all-important U.S. business. That might be seen as a handicap in some quarters. But not necessarily in the case of Uchida, who values regional autonomy.

"He wants to really, really understand the details of every decision he makes," said his China associate. "But he gives a lot of latitude to the experts on the ground."