With many automakers facing a decline in demand for their products, as well as a rapidly shifting market that has pivoted away from EVs after those same companies made major investments in electrification, more than one is also staring at painful financial results. That list certainly includes Nissan, which recently reported some disappointing H1 2024 finances. As a result, that Japanese automaker will make some big changes to help right its financial ship moving forward.
Nissan is aiming to reduce its costs by $2.6 billion while also maintaining a heathy free cash flow, and to do that, it plans to reduce its global work force by 9,000 – as well as cut global production capacity by 20 percent. On top of that, Nissan CEO Makoto Uchida will voluntarily forfeit 50 percent of his monthly compensation starting this month, while other executive committee members will also take voluntary pay cuts.
“These turnaround measures do not imply that the company is shrinking. Nissan will restructure its business to become leaner and more resilient, while also reorganizing management to respond quickly and flexibly to changes in the business environment,” Uchida said. “We an aim to enhance the competitiveness of our products, which are fundamental to our success, and set Nissan back on a path of growth. As a cohesive team, we are dedicated to working together to ensure the successful implementation of our plans.”
Nissan isn’t the only automaker facing financial troubles these days, particularly in Europe. There, Ford has shuffled around its management team and made several rounds of job cuts, and Volkswagen is eyeing the closure of multiple plants. Meanwhile, General Motors recently announced that it was laying off 1,000 U.S. workers, and things are even worse at Stellantis – that company may wind up axing some of its brands, in fact, as its dealers face a tremendous inventory glut.
Comment
All because of pure stupidity and total arrogance. Carlos Ghosn had a good thing going with low prices and high volumes. Now, the current Japanese royalty conspired with all the other automakers during COVID to raise prices absurdly and volumes tanked. Now this. But, of course, instead of slashing those absurd prices, it lays off thousands. More total arrogance. And this is just #1 of many that will go the same route, eventually, including Ford. Ford and others also have the foolish EV blunder contributing as well.