YOKOHAMA – New Nissan Motor Co. chief Makoto Uchida vowed Monday to turn around the teetering automaker, which has found itself in a downward spiral since the arrest of former Chairman Carlos Ghosn last year.
The firm aims to break away from the two-decade Ghosn era that was marked by a top-down system in which power was concentrated with the charismatic chief. Instead, the company wants to put more emphasis on collective leadership with a fresh three-pronged management structure.
But it remains to be seen whether Nissan’s gambit will pay off, as the new leaders will face myriad daunting challenges, such as sinking profits, damaged relations with French alliance partner Renault SA and problematic corporate governance.
“I say this honestly. Nissan is in a very difficult situation,” said Uchida — who started his new role Sunday — during his inaugural news conference at the company’s headquarters in Yokohama on Monday.
Besides Uchida, Nissan has two other new leaders. Former Mitsubishi Motors Corp. COO Ashwani Gupta has been appointed COO, and Jun Seki, who was senior vice president at Nissan, is now vice COO.
Under the new structure launched Monday, Uchida said he will closely work with Gupta and Seki. He added that although some have said a three-person structure will slow down decision-making, he believes this won’t be the case.
In an apparent effort to illustrate the unity of the three leaders, Gupta and Seki also made short speeches at the news conference.
The troika structure is intended to prevent a single leader from wielding excessive power, as Ghosn was seen as doing, according to a panel of experts commissioned by Nissan to come up with improvements to its corporate governance.
“Considering the current situation, it may be true that Nissan needs strong leadership, but at the same time, there are also ideas contrary to that,” Yasushi Kimura, who chairs Nissan’s board, said in October after the company announced the new leaders.
Kimura said the collective leadership will facilitate friendly competition among the top officials, who will also be supporting each other. The management system is expected to be more transparent and produce fairer decisions, Kimura added.
Uchida also said he intends to reform Nissan’s corporate culture, in which the firm set some unachievable business goals and focused more on short-term profit, which ended up backfiring.
Nissan’s operating profit for the April-September period plummeted by 85 percent to ¥31.6 billion compared with the same period the previous year. Its unit sales declined in all major global markets. The automaker also revised downward its full year forecast for operating and net profit to ¥150 billion and ¥110 billion from ¥230 billion and ¥170 billion, respectively.
Uchida also emphasized the importance of the alliance with Renault and Mitsubishi Motors as a means to survive the changing competitive environment in the industry, where the know-how and technology needed to produce environmentally friendly vehicles and develop autonomous driving will be essential.
“As we aim to turn around the business and for further achievements, the alliance is indispensable,” Uchida said.
Asked what he thinks of Renault seeking a merger with Nissan, Uchida said he is not talking about that option at all with Renault at this point because he believes the alliance partners first need to pinpoint problems that each face.
Kimura said Uchida, Gupta and Seki all share an understanding that maintaining and strengthening the alliance is critical.
Since Gupta is a former COO at Mitsubishi Motors and is originally from Renault, the new three-pronged system may be intended to maintain harmony in the alliance. The tie-up has been somewhat strained since the exit of Ghosn, who was the glue that held it together.
Ghosn was arrested in November 2018 for allegedly underreporting his salary. He denies any wrongdoing. Hiroto Saikawa took over the leadership but was hit by allegations that he had been overpaid, forcing him to step down in September.
To improve its corporate governance, Nissan created a nomination committee to select directors. Uchida was chosen among some 10 candidates.
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