Struggling iconic car firm ‘asking to delay payments' – after axing hundreds of jobs at UK factory and £4billion losses
FORK IN THE ROAD Struggling iconic car firm 'asking to delay payments' – after axing hundreds of jobs at UK factory and £4billion losses
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A STRUGGLING car brand has reportedly asked to delay payments to suppliers in a bid to free up funds.
The company's new CEO has already confirmed it will be axing hundreds of jobs at a UK factory after reporting £4 billion in losses in the last financial year.
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Nissan has reportedly asked suppliers if it can delay payments
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It comes after 250 job losses at its Sunderland factory
Credit: AFP
Nissan's Sunderland factory will be axing around 250 jobs as part of a "voluntary leave scheme" which allows employees to choose to leave their role with the company's support.
Earlier this year the manufacturer announced 20,000 job losses, seven factory closures and a pause on all post-2026 new car development.
It is all part of a restructuring project overseen by CEO Ivan Espinosa after he was appointed in April.
Now, Reuters has reported that the major car manufacturer has asked suppliers to allow it to delay payments in an attempt to free up short-term cash.
According to a source and emails seen by Reuters, Nissan has asked some suppliers in Britain and the European Union to accept delays in payments.
This would give the company more cash on hand at the end of the April-June first quarter.
Requests like this are not uncommon as a means of freeing up cash flow.
In a statement, Nissan told The Sun: 'As we take quick actions under the Re:Nissan plan, we are leveraging the strong and flexible relationships we have built with our suppliers to ensure financial stability and maintain solid foundations for future success.
'With their full agreement, we have incentivised some of our valued suppliers to collaborate under more flexible payment terms, at no cost to them , in order to support free cash flow.
'As previously communicated, our cash position remains strong. We continue to cooperate with our valued suppliers across our operations, including in the UK, where we are looking forward together to the launch of the all-new Nissan LEAF and the arrival of our new e-POWER technology to Qashqai, the highest-volume car built in Britain.'
While the deal could help the company in the short-term, they could be left with more to pay down the line.
A source from the company told the reporter that June payments would be delayed until August 15, while some would be pushed until September.
New Nissan Leaf tested - it's bigger, better and goes further
These delays are not being forced on suppliers, but were sent as requests earlier this month.
It is all part of Nissan's attempt to rebuild in light of their financial difficulties.
The company hopes to have positive free cash flow by the 2026 financial year.
In other emails, a director in the treasury department stated a target of freeing up $150million.
Suppliers have allegedly been given two options.
They can accept a delayed payment in return for a higher repayment with interest.
Or they can be paid on time by HSBC, with Nissan paying the bank back with interest later.
Nissan estimated that it could boost free cash flow by up to $59 million by extending payment terms.
It comes as another major manufacturer has reported a loss on its Nissan Motor shares.
Renault announced today that it will report a loss of about $11.2 billion in the first half after changing the way it accounts for the investment.
After a two-decades long partnership, the French carmaker is trying to distance itself from the struggling business.
Renault owns 35.7% of the company, and plans to assess changes in its value based on Nissan's share price, with no impact on its net income nor on dividends it pays out.
Essentially, they are interested in how much the company is valued at, not its monetary worth.
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