- Nissan faces a critical financial crisis, with “12 or 14 months to survive”.
- In an attempt to stabilise, Nissan has entered ‘Emergency Mode,’ cutting over 9,000 jobs.
- The dramatic 2019 escape of former chairman Carlos Ghosn adds a layer of embarrassment.
Nissan is in a dire financial situation; a senior official close to the company revealed to media that the auto manufacturing giant has “12 or 14 months to survive” without significant intervention. The Japanese carmaker has faced huge declines in key markets, leading to a loss of ¥9.3 billion (approximately AU$94 million) in the third quarter of 2024. This contrasts all too starkly with the ¥190.7 billion (AU$1.93 billion) profit posted during the same period in 2023.
Nissan experienced its most significant slump in China, with sales dropping 14.3 per cent between April and September. The USA saw a 2.7 per cent decrease, and overall global sales fell by 3.8 per cent year on year, including a 2.4 per cent decline in its native Japan. The same senior official also said:
“This is going to be tough. And in the end, we need Japan and the US to be generating cash.”
Anonymous Nissan Senior Official
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Nissan’s Emergency Measures: Job Cuts and Asset Offloading
Nissan declared it had entered ‘Emergency Mode’, implementing measures to urgently cut costs and raise funds. The company announced plans to slash over 9,000 jobs and reduce production capacity by nearly 20 per cent. New model launches have been delayed, and production has slowed, with dealers reportedly selling cars at a loss.
As part of its strategy to generate capital, Nissan reduced its stake in Mitsubishi Motors from 34 per cent to 24 per cent, selling off a 10 per cent share in November 2024. The company estimates it will save $3 billion by cutting jobs and production as it attempts to stabilise its financial position.
Nissan claims to be exploring all options, including seeking new long-term investors to replace some of Renault’s equity holdings. Renault, which already saved Nissan from bankruptcy in 1999, reduced its holding from 43 per cent to 36 per cent in 2023. Nissan bought back an additional 5 per cent in September 2024, aiming for 15 per cent cross-holdings between the two automakers.
Exploring Alliances: Potential Honda Investment
A partnership with Honda has emerged as one possibility. Nissan recently formed a strategic alliance with Honda and Mitsubishi to develop electric vehicles in China, a market where all three Japanese automakers are struggling against domestic brands. While neither company has officially commented on this plan, Nissan executives have described Honda investing in the company as a “last resort”. A Mitsubishi spokesperson said:
“We are currently exploring all possibilities and are eager to cooperate in areas where we can leverage our strengths.”
The restructuring of the Renault-Nissan-Mitsubishi Alliance, with Honda potentially joining, could be a pivotal step in securing Nissan’s future.
Carlos Ghosn’s Escape from Japan
And somehow, this news of imminent financial collapse still doesn’t top the rankings as Nissan’s most embarrassing news story of the past few years. On reading today’s headlines, we were reminded of Carlos Ghosn’s not-so-great escape from Japan in 2019 while awaiting trial on charges of financial misconduct.
Ghosn, who also held top positions at Renault and was instrumental in the Renault-Nissan-Mitsubishi Alliance, had been arrested in November 2018 over claims of underreporting his salary and misusing company funds. Under strict bail conditions, Ghosn faced the admittedly unpleasant possibility of a prolonged legal battle in a country with a 99.4% conviction rate.
Confined to house arrest and prohibited from contacting his wife, Carole, he decided to mastermind an escape. Disguising himself in, shock horror, jeans and trainers, he headed out into the streets of Tokyo unrecognised:
“You can imagine I had to go places where I never been, buy clothes I’ve never bought.”
Carlos Ghosn
The climax of the plan saw Ghosn being smuggled inside a large music equipment box, cleverly exploiting the fact that a swathe of concerts were happening in Japan at the time. Two men also disguised as musicians took him from a hotel in Osaka to a private jet waiting at the local airport. “The 30 minutes waiting in the box on the plane… was probably the longest wait I’ve ever experienced in my life”.
After a flight to Turkey and a quick plane change, he landed in Beirut, Lebanon. Not only is this his homeland, but it conveniently has no extradition treaty with Japan.
While Nissan grapples with financial woes, the ingenious if unbecoming escape saga of its former chairman adds a layer of drama to the company’s story that, frankly, we’d like to see more corporate behemoths embrace.