Nissan's new CEO might possess the ruthless qualities needed to initiate a turnaround.

      Nissan

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      With the car manufacturer seemingly facing imminent failure, Nissan CEO Ivan Espinosa has presented a revival plan that is both harsh and oddly reminiscent of past strategies. Is this a nod to Ghosn's legacy?

      Last week, Nissan Motor Co. announced its financial outcomes for the 2024 fiscal year, and unsurprisingly, the results were dismal. While the Japanese automaker saw a cumulative 2.8% sales increase year-over-year in the U.S. for its Nissan and Infiniti brands, with a notable 10.3% rise in the fourth quarter, globally, the last three months culminated in a net loss of 670.9 billion yen ($4.5 billion).

      This marks Nissan's second-most significant fiscal failure in the last 25 years, as reported by Automotive News. However, to claim that Nissan has exhausted all options to rectify the situation would be premature.

      Despite the unsuccessful partnership with Honda, the layoff of 9,000 workers, and a 20% reduction in production, there appears to be further inefficiencies to address. Simply searching for spare change won't suffice.

      The new reduction initiative is named Re:Nissan. Between now and 2027, the revival plan entails cutting an additional 11,000 jobs and consolidating its 17 production facilities down to just 10. Additionally, Nissan aims to achieve total cost savings of 500 billion yen ($3.34 billion).

      “We would not be implementing these measures if they weren't crucial for Nissan's survival,” Espinosa stated. The streamlined strategy aims to achieve “the goal of returning to profitability by fiscal year 2026.”

      Espinosa, who was appointed CEO less than two months ago, is not new to Nissan. He has steadily advanced within the company since 2003, primarily in product roles. Beginning as a product specialist, he worked his way up to Chief Planning Officer, and now holds the titles of multihyphenate executive officer, president, and CEO. This background means he is familiar with former CEO Carlos Ghosn, who was initially brought in to revitalize Nissan in the early 2000s, a task he accomplished even a year ahead of time.

      In fact, there is significant overlap between Espinosa’s Re:Nissan plan and Ghosn’s Nissan Revival Plan. Is this merely coincidental, or is it a replication of a strategy that previously yielded results for the automaker that is once again struggling?

      As Automotive News highlights, Ghosn's appointment followed a significant fiscal year downturn, and his plan included cutting 20,000 jobs, closing five plants, and reducing costs by 1 trillion yen ($6.68 billion). Similar to Ghosn, Espinosa has opened up internal communication lines, encouraging cost-saving suggestions and input from 3,000 employees. Approximately 2,300 proposals have been put forward, with around 800 ready for action.

      Was the Nissan revival 1.0 a success? Mostly. It led to nearly twenty years of net profits, though this was largely due to discounts for sales volume rather than offering fresh products. Then Ghosn was ousted. The once-frugal CEO became an international fugitive and later a subject of Netflix documentaries. This might be a chapter in the playbook that Espinosa has already discarded.

      Regarding a partnership, the new Nissan leader is open to collaboration, but only under the right circumstances. “The objective isn’t to form a partnership out of sheer necessity due to our financial situation,” Espinosa told Bloomberg TV. It seems that a major merger isn’t currently on the table, but Nissan is willing to explore partnerships with other automakers, tech companies, and even firms based in China.

      For the moment, the focus is inward. The Re:Nissan initiative is tough but necessary for the OEM to regain stability. “Are we confident this will be sufficient? Yes, we believe it will drive the results we need, but we must act swiftly,” Espinosa asserted. “We aim to revive the company's heartbeat.”