With the automaker seemingly on the brink of collapse, Nissan CEO Ivan Espinosa has laid out a revival plan that is shockingly cutthroat yet surprisingly familiar. The ghost of Ghosn, anyone?
Last week, Nissan Motor Co. released its financial results for the 2024 fiscal year, and, to our unsurprised ears, the numbers were not good. Although the Japanese automaker enjoyed a cumulative 2.8% year-over-year sales increase in the U.S. for its Nissan and Infiniti brands, including 10.3% growth in the fourth quarter, on a global scale, those last three months resulted in a 670.9 billion yen ($4.5 billion) net loss.
This is Nissan’s second-largest fiscal year failure in 25 years, reports Automotive News. And yet, to say Nissan has tried everything to right the ship is premature.
Despite the failed courtship with Honda, laying off 9,000 employees, and slashing production by 20%, apparently, there is still more fat that can be trimmed. And checking the couch cushions for change won’t be enough.
The new slimdown is called the Re:Nissan. Between now and 2027, the revival plan involves reducing the workforce by another 11,000 jobs and consolidating its 17 production plants to just 10. And some way somehow, finding a total cost savings of 500 billion yen ($3.34 billion).
“We wouldn’t be doing this if it was not necessary for the survival of Nissan,” Espinosa said. The shrunken but streamlined strategy is to reach “the goal of returning to profitability by fiscal year 2026.”
Espinosa was appointed CEO less than two months ago, but isn’t new to Nissan. Since 2003, Espinosa has gradually climbed the ranks, mainly on the product side. He started as a product specialist, eventually serving as Chief Planning Officer, and is now the multihyphenate executive officer, president, and CEO. This also means he’s no stranger to former CEO Carlos Ghosn, who, coincidentally, was brought in to reboot Nissan during the aughts. Which he did, and a year ahead of schedule.
In fact, much of Espinosa’s Re:Nissan and Ghosn’s Nissan Revival Plan overlap. Is it a coincidence or merely following a strategy that has already worked for the automaker that is once again treading water?
As Automotive News points out, Ghosn’s appointment followed a massive fiscal year fallout, and his plan aimed to cut 20,000 jobs, close five plants, and cut costs by 1 trillion yen ($6.68 billion). Similarly to Ghosn, Espinosa has opened up the internal communication channels, seeking cost-saving ideas and input from 3,000 employees. About 2,300 recommendations have been made, of which roughly 800 are ready to be implemented.
But did the Nissan revival 1.0 work? Mostly. What followed were nearly two decades of net gains, but there was a lot of discounting for sales volume and little in the way of fresh product. And then Ghosn was booted. The frugal CEO became an international fugitive and, subsequently, Netflix documentary fodder. But that’s probably a playbook page Espinosa has already torn out.
As for a dance partner, the new Nissan boss isn’t opposed to sharing the floor, but it has to be for the right reasons. “The point is not to do a partnership because we need to be partnered with somebody because of the cash position,” Espinosa told Bloomberg TV. Perhaps a mega merger isn’t in the works, or what’s best, but Nissan is open to discussing partnerships with other automakers, tech firms, and even China-based companies.
For now, the focus is inward. Re:Nissan is brutal, but at the same time, what the OEM needs to get back on its feet. “Are we confident that this is enough? The answer is yes, this will be enough to drive the results that we need, but we need to move fast,” Espinosa said. “We want to bring the heartbeat back.”