Nissan CEO Makoto Uchida announced a desperate new bid to reverse the company’s mounting losses after a planned merger with Honda collapsed. The second-largest Japanese automaker now plans to close three plants, reduce U.S. production and eliminate thousands of jobs. The announcement came as Uchida revealed still more losses for Nissan’s latest fiscal quarter.
Nissan’s Uchida joked with his Honda counterpart Toshihiro Miebe during the announcement of a merger plan last November.
With a proposed merger with Honda no longer on the table, Nissan management is racing to find a way to reverse mounting losses and head off a potential collapse, CEO Makoto Uchida on Thursday expanding upon the “emergency” plan he first revealed last November.
During a meeting with reporters to go over the company’s latest quarterly losses, Uchida and other officials with the second-largest Japanese automaker said Nissan will slash U.S. production, close three global plants and trim thousands of workers, including 20% of its executive ranks. Uchida also indicated a search is now underway for an alternative partner. It has been widely reported that Chinese tech giant Foxconn is one interested buyer.
“Can we continue to survive as a standalone company? We’ve been discussing that for some time now. This is a big subject matter,” he said. “Without taboo, we have to explore all options.”
More bad news
Despite rolling out new and updated products, like this 2025 Murano, Nissan continued to record weakened sales and earnings during the latest quarter.
Nissan has been experiencing the death of a thousand cuts over the last few years, a situation that was worsened by the COVID pandemic and from which it has failed to recover so far.
Based in Yokohama, Nissan experienced its second consecutive quarterly loss, with a 78% decline in operating profits, for the quarter running from October through December, at 31.1 billion yen, or $197.5 million dollars. The third quarter in the traditional Japanese fiscal year. It reported a net loss of 14.1 billion yen, or $89.5 million. Those figures were down from 141.6 billion yen and 29.1 billion yen, respectively, a year ago.
Global production for the period was off 12%, year-over-year, to 742,235 vehicles, while global sales were off 2.2%, to 801,000 vehicles. There was a glimmer of good news from North America, the automaker’s biggest regional market, where sales rose 9.8%, but Europe experienced a 8.9% dip and, in China, the ongoing consumer shift to domestic brands resulted in a 16.2% fall in deliveries
Uchida sharpens his knife
Nissan’s plant in Thailand will be the first to close.
Nissan’s CEO made it clear there would be a blood-letting when he announced he was launching an “emergency plan” expected to trim capacity and production and cost an estimated 9,000 jobs worldwide.
On Thursday, Uchida made it clear the cuts would run even deeper.
They will now include a 20% reduction in executive level staff. There will be 2,500 job cuts in sales and administrative staffs globally. But the biggest reduction will come in manufacturing, an estimated, 6.500 jobs.
Many of those will be felt at the three plants Nissan will shutter. It provided details on just one on Thursday, confirming that its factory in Thailand will be closed by the beginning of the next fiscal year starting April 1. The other shutdowns will be completed by March 31, 2007, said Uchida.
For now, at least, North America is expected to be spared the worst of the plan but will still feel its sting.
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Nissan goes light on North America
Nissan will cut shifts at plants in the U.S., like the Canton, Mississippi assembly complex.
The automaker’s two U.S. assembly plants will see cuts in production through shift changes. But, for now, the operations in Smyrna, Tennessee and Canton, Mississippi have largely been spared, reflecting the relative strength of the local market.
Uchida did not indicate whether Nissan was also responding to pressure from the Trump administration which is threatening to place tariffs on vehicles imported from a number of traditional trade partners
Still, when all the planned cuts are combined together, Nissan will enter the 2027 fiscal year with global production down 1 million from a recent peak of 5 million. About half of those cuts have already been made in China.
If the automaker can simply stabilize sales at current levels the dial back would allow its remaining factories to operate at about 85%, Nissan anticipates, up from an inefficient and unprofitable 70% today.
Is it enough?
The emergency plan announced last autumn was greeted with plenty of skepticism and the latest update left many analysts still second-guessing.
“It feels like they are nibbling around the edges,” Christopher Richter, senior analyst at CLSA Asia-Pacific Markets told Automotive News. “They have huge factories in Japan, in Mexico and in Tennessee. Instead of taking a bath and putting it all behind them, it’s like they’re taking a light shower.”
Even Uchida didn’t seem to believe this would be enough to fix what’s wrong with Nissan.
Honda, Nissan and Mitsubishi execs shared a rare moment of camaraderie during the merger announcement in November.
Nissan continues looking for a partner
It’s been nearly two months since Nissan and Honda confirmed long-standing rumors that they were discussing merger. But observers questioned the viability of the plan – set to be completed by 2026 – all but immediately.
A key question was how the new management team would be structures, especially with Honda signaling it expected to be in control. That failed to connect on the Nissan side, no surprise considering the automaker only recently had restructured its role in the quarter century-old Renault-Nissan-Mitsubishi Alliance. It ultimately rejected the idea of having to play second string to a partner.
“We were not confident that our autonomy would be preserved or that Nissan’s potential would truly be maximized,” Uchida said during a press conference.
That said, he confirmed that Nissan “will continue to focus on exploring strategic partnerships that aim to create new value.”
Foxconn circles
Whom might be out there? Uchida wasn’t saying. But there have been frequent reports in recent months suggesting that China’s Foxconn could make a move to acquire the weakened Japanese automaker.
Foxconn is best known as the producer of Apple’s wildly popular iPhone but it has been anxious to get into the auto industry and even took over the old General Motors plant in Lordstown, Ohio after the collapse of Lordstown Motors. The start-up had purchased the closed facility hoping to get into the EV market.
Sources in Japan indicate the Japanese government desperately wants to avoid such an acquisition, one reason why Nissan and Honda tried to come together. Whether regulators might get involved again has not been disclosed.
Nissan management is dumber than a rock, they deserve what they get.