Nissan restructures leadership team after merger talks collapse

The Nissan logo at its headquarters in Yokohama, Japan. (Photo: AFP/VNA)

On March 11, the famous Japanese car company Nissan announced a change in its management team, replacing four executives, as a move to restructure the management organization after ineffective business operations and the collapse of merger negotiations with Honda.

According to a VNA correspondent in Tokyo, the announcement stated that Planning Director Ivan Espinosa was appointed as Nissan's CEO from April, replacing Mr. Makoto Uchida, who will officially resign on March 31. The decision was made at a board meeting held on March 11.

Mr. Uchida took over as President and CEO of Nissan in December 2019, when the company was struggling following the arrest of former Chairman Carlos Ghosn.

Mr. Uchida's greatest achievement was successfully reviewing the partnership with French carmaker Renault, the largest shareholder, and regaining independence in management.

The company also took measures to overcome the difficult situation such as closing factories and cutting staff.

After that, although business performance temporarily recovered, sales in the two major markets of the US and China remained sluggish and the company fell into crisis again. This led to a hearing to clarify the responsibilities of the company's management, including the reasons for the failure of merger negotiations with Honda.

Speaking at a press conference explaining his decision to resign, Mr. Uchida said he realized he no longer had the trust of shareholders and that his decision to resign early was in the best interests of the company.

Meanwhile, new CEO Espinosa expressed his determination to help Nissan turn things around to regain its past glory.

At present, Nissan's business performance is really alarming.

Consolidated net income for the fiscal year ending March 2025 is expected to have a deficit of 80 billion yen (about $540 million) and there is excess production capacity at factories located in many countries.

In November 2024, the company announced plans to cut production capacity by 20%, mainly at overseas factories, and lay off 9,000 employees. The new management team will need to introduce new rationalization measures and regain profitability.

In December 2024, Nissan and Honda announced they were discussing a merger. The plan was to have both companies under a newly formed parent company, but Nissan opposed the idea of becoming a subsidiary of Honda and the deal fell through in February.

Currently, some Nissan executives and major bankers still maintain their stance of wanting to merge with Honda, so it is possible that the two sides will resume negotiations after Nissan has a new leadership team.

In addition, Taiwan's Foxconn, a company that has entered the electric vehicle (EV) sector, is also expressing its desire to cooperate with Nissan.

The balance of power in the global auto industry is shifting with the emergence of new companies from the US and China.

Until a few years ago, Nissan, together with Renault and Mitsubishi, formed one of the world's largest auto alliances, on par with Toyota and Volkswagen.

However, up to now, Nissan is no longer able to survive on its own, making restructuring more urgent than ever./.

According to VNA

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