Report Claims Nissan to Announce 10,000 Job Cuts, Plummeting Profit
Nissan is currently preparing a financial report that is alleged to show its first-quarter profit falling by around 90 percent, necessitating over 10,000 job cuts. The company told the world to brace for a bad year in May, following an abysmal earnings report for the 12-month period ending on March 31st, 2019. At the time, CEO Hiroto Saikawa said the automaker had “hit rock bottom.” But Nissan is still falling, if reports are to be believed.
The Japanese company released a statement that vaguely refutes the claims against on Wednesday while also validating them. However, numerous unnamed insiders have suggested the reports are accurate and several named staffers acknowledged that the automotive firm was facing serious problems.
From Nissan:
On July 24, 2019 the Nikkei Shimbun published an article regarding Nissan’s financial results for the first quarter of fiscal year 2019. The article was not based on any announcements by the company.
While the financial results for the quarter are still being reviewed, the operating profit figure reported in the Nikkei Shimbun article was broadly accurate. However, no official confirmation can be made until the final results have been approved by the company’s board of directors tomorrow. Following that approval, the company plans to announce the results on the same day.
We know Nissan is struggling in the United States. Years of angling for high volumes have tainted the brand’s image and necessitated heavy discounting, whittling down its profit margins as deliveries decline. It has become a snake eating its own tail.
“Deteriorating performance in the United States is a big issue that we’re facing,” Motoo Nagai, chairman of Nissan’s new audit committee told Reuters. “For a long time we were concerned with increasing volume [in America]. We were chasing numbers. Now it’s time to enhance the brand.”
Globally, Nissan still hasn’t recovered from the financial scandal involving Carlos Ghosn — who pioneered the high-volume plan, corporate alliance with Renault, and saved the company from disaster years earlier. Most official communications fault the automaker’s current plight on Ghosn’s “negative legacy.” But many investors are also concerned that the alliance is breaking down and fretting over the current management’s competency.
Saikawa, who was slated to be fired prior to Ghosn’s arrest late last year, initially said he would retire. But he is now staying on as CEO for an indeterminate amount of time. This has also been a source of concern due to the internal strife surrounding him. Although Nissan is currently hunting for his successor at his request — making an extended stay as chief unlikely.
Nissan’s quarterly results will be posted on Thursday. The job cuts are rumored to be isolated largely in Asia and South America.
[Memory Stockphoto/Shutterstock]
A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.
More by Matt Posky
Comments
Join the conversation
What is the difference between Altima and Maxima? They look the same and all dimensions including wheelbase are the same. And no one want cars anyway. So why the duplication?
Since Renault took control of nissan in 2000 their reliability and quality have gone down the shitter. They went from being reliable cars that were kinda awkwardly proportioned to cars that were the right size but cheap and unreliable and this is all due to Carlos Goshen. He got the product right (2002 altima, 04 maxima, 2005 rouge)saved the company but then drove them to obsessing over cost cutting (2002 Altima 04 maxima 05 rouge) and market share chasing and today's mess is the result. Now nissan is where Pontiac was in the 2000s and its gonna take them 5-10 years of higher quality products to get their reputation back and I don't see that happening. Just forget nissan and get a Honda.