Triage Time, Part II: Nissan Doubles Down on Cash-saving Efforts, Report Claims

With sales and profits nowhere near where it would like them to be, Nissan is reportedly clinging to every penny in its possession. Following an earlier report of a two-day furlough of U.S. staff scheduled for the first week of the new year, Reuters reports that savings will now be achieved wherever the company can find them.

Don’t expect to see many executives or staff winging their way across the globe in the coming months.

According to three internal sources, costs are being slashed across the board, with travel, sales incentives, and promotional events topping the list of non-essential expenses. The automaker reportedly plans to “conserve every yen” it can, a source said.

The penny-pinching effort will be especially intense in North America, the report claims, as that region has seen the steepest drop in sales. Nissan Group’s U.S. volume fell 15.9 percent in November, year over year, with sales through the end of last month falling 7.8 percent short of last year’s year-to-date tally.

Globally, Nissan Group sales fell 10.3 percent in November, with YTD volume down 8 percent.

From Reuters:

Meetings that three or four people would once have traveled to attend in person, might now only have one Nissan representative, the sources said, while other gatherings and dinners have been canceled altogether or replaced by video-conferencing.The extensive spending cuts come in tandem with Nissan’s decision this month to order a two-day furlough for U.S. employees Jan. 2-3. There is also an effective travel ban for staff in the United States, where sales have been particularly hard hit, one source said.

While the company is in no danger of going under, thanks to considerable cash reserves, one source did remark, “The house is not on fire, but there’s something smoldering.”

Last month, the automaker announced a 70-percent drop in operating profit during the previous quarter. The newfound cost-cutting effort will continue to the end of the financial year in March, sources claim, though it’s likely to remain in place after that point.

As pressures mount on the company, both from falling sales and the ongoing disruption to its corporate hierarchy born of the 2018 arrest of former Chairman Carlos Ghosn, Nissan’s stock has taken a serious tumble. This week’s announced departure of vice chief operating officer Jun Seki, a man tasked with helping to turn around the struggling automaker, did nothing to add buoyancy to the company’s share price.

[Image: Nissan]