The Japanese car manufacturer Nissan has initiated a radical emergency program: The automotive giant announced massive job cuts and a halving of CEO Makoto Uchida's salary to avert the impending collapse. The announcement of the measures comes immediately after the publication of a quarterly loss – a bitter signal for Japan's third-largest car manufacturer.
Sharp Cut in Production and Massive Cost Reduction
In a desperate attempt to become profitable again, Nissan plans to reduce its global production capacity by 20 percent. This will be accompanied by a cut in operating costs by 400 billion yen (around 2.6 billion US dollars). Uchida justified this drastic measure by stating that Nissan was too late in responding to the rapid market changes – particularly the demand for hybrid and electric vehicles. "We have learned a hard lesson and could not adapt in time," Uchida admitted in an online press conference.
Fierce competition from China and declining demand
Nissan's difficulties reflect a profound crisis that has gripped the entire global automotive industry.
Focus on strategic alliances
Another strategic step is reducing Nissan's stake in Mitsubishi Motors to create financial leeway. After weakening the alliance with Renault, Nissan is increasingly focusing on a partnership with Honda. The plan is to introduce a new electric vehicle by the end of the decade and jointly develop software solutions to compete on equal footing with competitors from China.
Job cuts as a last resort
With the 9,000 job cuts - almost seven percent of the entire workforce - Nissan hits its employees in the most sensitive area. "In view of the serious situation, it is unavoidable to make tough decisions," the corporation said. The operating loss of 9.3 billion yen in the past quarter speaks volumes and represents a massive deterioration compared to the previous year's profit of 190.7 billion yen.
A new ray of hope: the Chief Performance Officer
To accelerate the turnaround, Nissan plans to introduce the new position of Chief Performance Officer in December. This will enable faster decisions and a greater focus on securing revenue and profitability – a clear sign of the urgency of the crisis. The plan envisages revising the existing, partially outdated model portfolio and approaching the US market with modern plug-in hybrids. In China, new electric vehicles are also to be introduced.
A Restart for the Future
Nissan is in the midst of an existential crisis, the outcome of which remains uncertain. With a strict savings plan, strategic partnerships, and a focus on forward-looking technology, the automaker is trying to emerge from the bottom. Whether this succeeds will be seen in the coming months – the measures are drastic, but perhaps that's exactly what's needed as a wake-up call.
