The Chaos at Nissan Has Reached a New Low Following Billions in Losses | Carscoops
Many shareholders are understandably frustrated with Nissan's current financial situation.
Nissan announced a staggering net loss of $4.5 billion for the last financial year.
The first quarter saw losses amounting to $1.38 billion, with no earnings forecast for the current year.
Following a contentious shareholder meeting, two prominent board members were removed.
Nissan has been in a precarious position since last year and is in urgent need of a turnaround. Its merger with Honda fell apart publicly, and the company continues to incur losses, plans to lay off 20,000 employees, and will shutter seven of its production facilities. The escalating crisis at Nissan was evident during the automaker’s annual general meeting earlier this week.
At the meeting led by new CEO Ivan Espinosa, Nissan disclosed a $4.5 billion net loss for the previous financial year. While it did not provide earnings projections for the current year, it estimated a first-quarter loss of 200 billion yen, equivalent to $1.38 billion at current exchange rates. Additionally, Nissan has halted its dividends.
The meeting, which took place at Nissan’s headquarters in Yokohama, Japan, was attended by 1,071 shareholders. During the event, Espinosa announced that former CEO Makoto Uchida and Renault's chairman Jean-Dominique Senard had both been removed from Nissan’s board of directors.
One shareholder proposal claimed that “the capabilities of former CEO Makito Uchida as an executive are extremely low,” urging the board of directors to take responsibility for “selecting such an individual as CEO.” The proposal also stated that the directors who appointed Uchida should “leave the company.” Despite the assertive nature of the proposal, Nissan’s board of directors rejected it.
Another shareholder accused Nissan of attempting to “shift its responsibilities to frontline workers” by eliminating jobs while many executives remain in their positions. Complaints regarding the cut in dividends also surfaced.
There was a proposal for Nissan to take action regarding Nissan Shatai, its listed subsidiary. However, this was voted down by the shareholders and also faced opposition from Nissan. Some Japanese firms, including Toyota, are being encouraged to address “parent-child listings” or subsidiaries that could affect governance. For instance, Toyota plans to privatize its listed subsidiary Toyota Industries in a $33 billion deal.
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The Chaos at Nissan Has Reached a New Low Following Billions in Losses | Carscoops
Many shareholders are understandably frustrated with Nissan's present financial situation.