- Exactly what is happening at Nissan is not clear just yet, but Reuters is reporting that plants will close and some models may disappear.
- The troubles aren’t a huge surprise, since Nissan’s profits were down 73 percent in the first half of its 2019 fiscal year.
- Nissan isn’t saying anything definite just yet, although Car and Driver requested comment on the Reuters story.
Trouble has been brewing at Nissan for a while, and it seems like the hammer is finally about to fall. Earlier this month, we heard that corporate spending would be cut but that shoppers were not likely to notice any changes when they walked into their local dealerships. Now, though, we find that exactly those kinds of changes might be coming, and soon.
We say “might” because, when contacted, a Nissan spokesperson questioned the veracity of a new report from Reuters that says the situation at the automaker is “do or die.” Nissan won’t tell us exactly what’s going on or what it believes Reuters got wrong, but we expect some sort of official statement will be released soon. For now, we have the Reuters report, which is based on information from nine “people familiar with Nissan’s plans.” Reuters said all nine of these sources “declined to be named due to the sensitivity of the subject.”
According to those sources, Nissan’s plans apparently include aggressive cost cutting that would eliminate 4300 white-collar jobs, mostly at Nissan’s U.S. and European headquarters, and shut down two manufacturing sites. Reuters also says that some Nissan models, product options, and trims in each model line are likely to go away.
The Bloomberg news service is also reporting that Nissan North America will close its Northwest and Mountain States regional sales offices later this year. Salaried and hourly U.S. Nissan employees 52 years old and older will be offered “voluntary separation” packages, Bloomberg says, but it did not say how many of Nissan’s 20,000 U.S. employees it wants to part ways with.
In late December, Nissan Japan slashed nonessential spending as well as things like vehicle sales incentives and promotional events. Nissan North America followed that with an announcement that it would cut travel by 50 percent and extend the New Year holiday by two days in an effort to save some cash.
It’s cash that needs to be saved. Nissan announced in early November that its profits for the first half of its 2019 fiscal year dropped 73 percent compared with 2018. The causes were not surprising: falling sales, a stronger yen, and higher material costs. Infiniti, Nissan’s luxury brand, also left the Europe market last spring.
Hanging over all of these issues is the arrest of now fugitive former CEO Carlos Ghosn, who was arrested in November 2018 (and then again in April 2019) for alleged financial misconduct. In late 2019, he escaped house arrest in Japan and secretly flew to Lebanon. Since then, Ghosn has not gone quietly into that good night. In an interview with CNBC earlier this week, he told foreign executives working in Japan they they have to be very careful, “because unless the system changes, you’re playing with your life.”