Nissan has been mired in financial issues for some time now, which have resulted in the appointment of a new CEO, massive job cuts, various other cost-cutting measures, and a failed merger with rival Honda that fell apart mere months ago after the two sides couldn’t come to an agreement regarding just how that merger was slated to pan out, logistically speaking. In addition to cutting 20,000 jobs across the company’s global operations, Nissan is also offering a voluntary separation program to a limited number of salaried employees in the U.S. Now, the Japanese automaker is apparently trying to delay supplier payments, too.
According to Reuters, Nissan has asked some of its suppliers to allow it to delay payments in an effort to free up some funds in the short term, a move that comes after the company posted a $4.5 billion net annual loss in the financial year which ended in March. Those suppliers are based in the UK and Europe, and if they agree to such terms, it could benefit both sides. For Nissan, the delay would give it more cash on hand for the end of Q1, while suppliers are being incentivized as well.
“They could choose to be paid immediately or opt for a later payment with interest,” Nissan said in a statement. Such requests aren’t uncommon, and it seems that Nissan did precisely the same thing prior to its year-end financial reporting, which is just one way the automaker is seeking to boost its free cash flow as it remains mired in financial issues, in general. “While we are taking these actions we aim for sufficient liquidity to weather the costs of the turnaround actions and redeem bond maturities,” Nissan said, adding that it expects to record a negative free cash flow of 550 billion yen ($3.8 billion USD) compared to 303 billion yen in Q1 2024.
As Ford Authority recently reported, Nissan will utilize part of the BlueOval SK Battery Park site to build batteries for its own EVs. That joint-venture between Ford and South Korean battery maker SK On will only utilize one of two under-construction plants and hire 2,500 workers – half its original plan, due to a general slowdown in demand for EVs, with production currently slated to begin very soon.
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