Boss of car brand ‘facing crisis' reveals ‘comeback plan' in ‘stormy' meeting after 20,000 jobs axed & factories shut
The manufacturer has put losses down to costs of carrying out new CEO's strategy
SHIFTING GEAR Boss of car brand 'facing crisis' reveals 'comeback plan' in 'stormy' meeting after 20,000 jobs axed & factories shut
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THE boss of a reportedly struggling major car firm has laid out plans for the company's 'comeback' during a "stormy" meeting.
On Tuesday, Nissan's annual general meeting was held in Tokyo, Japan, weeks after announcing it will be axing 20,000 jobs.
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Ivan Espinosa took over as CEO of Nissan in April this year
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Nissan shares have fallen by 36% in the last year
Credit: Reuters
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Espinosa plans to make big cuts in a bid to revive the company
Credit: David Shepherd Photographer shep@Davidshepherdphotographer.com
It marked the first for new boss Ivan Espinosa who hopes to halt the Japanese company's decline through his plans for big cuts.
These cuts also include closing seven plants and cutting a total of around 25% of Nissan's workforce.
One shareholder reportedly accused the board of trying to 'shift its responsibility to frontline workers' by cutting jobs while retaining their own positions.
Espinosa, who replaced Makoto Uchida as CEO in April, is a Nissan veteran, and all eyes are currently on him to revive the company.
This comes after shares have fallen some 36% over the last year and dividend payments have been suspended, according to Reuters.
Reuters also claim that shareholders vented their frustrations over the automaker's poor performance at the annual meeting, with some allegedly demanding greater management accountability for the deepening crisis at Japan's third largest company.
Nissan reported a $4.5billion net loss in the last financial year, with there being no guarantee it will return to profit this year.
In fact, so far, it has reportedly declined to give a full-year earnings forecast, and has estimated a first-quarter loss of $1.36billion.
The firm also told MPs earlier this year that it is due to round up 2025 with debts of £10billion.
All the same, Reuters reported that shareholders voted down a number of proposals that the company had opposed, including an activist-shareholder proposal that would have forced Nissan to take action on listed subsidiary Nissan Shatai.
Luxury automaker to convert once-beloved sports bar left abandoned for years into an 'exclusive' motorcycle dealership
The manufacturer has put losses down to costs to carry out a strategy planned by Espinosa.
Earlier this year, he made way for a £2.6billion decrease in the value of production and forked out £316million in restructuring costs.
The restructuring included moves to axe 9,000 jobs internationally and the scrapping of a factory in Sunderland.
Tokyo-based activist shareholder, Strategic Capital, allegedly pressed Nissan to take action on its listed subsidiary as part of its overhaul.
While the proposal was defeated, the breakdown of the vote won't be known until next year.
According to Reuters, Japanese companies are under increasing pressure from the Tokyo Stock Exchange and regulators to clear up so-called 'parent-child listings,' as they are seen as unfair to minority shareholders and a drag on governance.
Strategic Capital had proposed that Nissan change its articles of incorporation so that it would be required to annually examine its relationship with listed subsidiaries and disclose what action it plans to take.
Nissan's board have reportedly opposed this proposition, saying changing its articles of incorporation would hinder its flexibility.
This follows Nissan announcing they were on the brink of collapse at the beginning of the year, as it entered a make-or-break 12 months.
In addition to the new plans to cut back, bosses also have already announced that the management team will transition to a single-layer, non-officer framework, which means a 20 percent reduction in top positions.
A spokesperson said in March, the move will create a 'streamlined and borderless organisation.'
These changes were implemented on April 1 this year.
The Sun has reached out to Nissan for comment.
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Shareholders are demanding greater management accountability
Credit: Reuters
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