As Nissan faces financial uncertainty, it has launched a comprehensive crisis management plan, implementing drastic measures to revitalize its operations: a workforce reduction of 9,000 positions, significant cuts to manufacturing capacity, and divestment from its majority stake in Mitsubishi Motors. Can the CEO realistically consider reducing his salary by 50%?
Mitsubishi Motors CEO Makoto Uchida, who succeeded Carlos Ghosn amidst turmoil, has revealed a comprehensive restructuring plan in response to the company’s surprise net loss in its latest quarter, according to Reuters.
According to a recent report, Uchida downgraded his predictions for full-year gross sales and working revenue, also revoking an earlier goal for net income, citing uncertainty in providing an accurate forecast at this time.
As part of its ongoing restructuring efforts, the company will make some key executive changes, including elevating Nissan Chairman Guillaume Cartier to Chief Efficiency Officer for his current regions: Europe, Africa, the Middle East, India, and Oceania.
Additionally, Uchida stated that he would accept a 50% salary reduction starting from this month to help support the team’s needs. According to a Google search, the executive reportedly earns around ¥657 million annually, equivalent to approximately $4.3 million. This significant restructuring effort will result in a substantial reduction of approximately 9,000 employees from the company’s international workforce of 133,580 individuals.
The newly implemented reforms appear designed to conserve the corporation’s significant financial resources of approximately $3 billion.
At a recent industry conference, Uchida emphasized the importance of learning quickly and adapting to reality, stating, “The query is, how do I do it fast and adjust to actuality?” “We cannot ignore the reality that our initial sales projections were overly ambitious, considering the rapid market fluctuations.”
Uchida aims to reduce its global manufacturing capacity by 20% to produce a total of five million items, thereby emphasizing its worldwide production capabilities. The manufacturer currently boasts a fleet of 30 refreshed or newly introduced models in its lineup, with no plans to discontinue any, although it may adjust launch timelines based on shifting market demands.
A major worry surrounding Nissan’s electric vehicles is their lackluster appeal, as its entire lineup consists only of the underwhelming Ariya and sluggish-selling Leaf in the US market. By 2026, Nissan plans to integrate its bidirectional, vehicle-to-grid technology into newly released electric vehicles (EVs), aligning with alliance partner Renault in offering this capability.
Nissan is poised to cash in on nearly a third of its approximately 34% stake in Mitsubishi, generating an additional $482.7 million as a result. During the tenure of Carlos Ghosn at Nissan, the company acquired a controlling 34% stake in Mitsubishi Motors; despite the transaction, Nissan continued to emphasize its intent to remain Mitsubishi’s largest shareholder. The alliance with Renault has committed around $5.2 billion to its EV and battery growth initiatives.
