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Nissan Motor Corporation, Japan

Since the announcement of the Nissan Revival Plan in Tokyo, October 1999, Nissan has rapidly implemented the plan.

The Revival Plan’s combination of growth through new products and cost reduction will see Nissan return to profit in this financial year 2000, reduce net automotive debt to 700 billion Yen by FY 2002, and achieve operating profit of 4.5 per cent of sales by FY2002.

Through the Revival Plan, Nissan is releasing resources from non-strategic, non-core assets and reducing its costs and debt to invest in exciting new products. Expenditure on new product development will rise to 60 per cent of total investment from year 2000 and beyond.

In 2000, in Europe Nissan has already launched two new strategic models, Almera and Almera Tino. There will be many significant new models coming and Nissan’s Paris stand signals a new fresh approach to its design. Ten completely new Nissan models will be introduced to Europe over the next three years.

Clearing the path ahead

Nissan’s new financial year, and first year of the Nissan Revival Plan, began on 1 April 2000. It was notable for closing a year of transition and the start of the company’s return to lasting profitable growth.

In many ways the financial year 1999 was Nissan’s most important year ever. A clear diagnosis of the company’s problems was made. Without any complacency or compromise, a plan was developed that addresses the issues of non-profitabilty, non-competitiveness and the company’s high level of debt.

The plan was immediately put to work.

The company announced one-time extraordinary charges totalling 711.1 billion Yen (Euro 6.97 billion) leading to a consolidated net loss of 684.4 billion Yen (Euro 6.71 billion).

On an operating level, Nissan made a consolidated profit of 82.6 billion Yen (Euro 809.5 million) with net sales of 5,977.1 billion Yen (Euro 58.6 billion).

A net profit of 60 billion Yen (Euro 526.3 million) and an operating profit of 110 billion Yen (Euro 964.9 million) is forecast for the financial year 2000.

Clearing the path for future growth required major organisational changes, to transform Nissan from a multi-regional company to a truly global operation.

Carlos Ghosn, chief operation officer, stressed the importance of globalising Nissan's management to eliminate barriers and empower management for fast and effective decision making. Nissan's world headquarters organisation is developing global strategies and targets with regional management, who will be fully empowered and responsible for swift implementation.

In June, Yoshikazu Hanawa becomes chairman and chief executive officer and the president title was assumed by Carlos Ghosn in addition to his function as COO.

In order to manage important business areas globally in real sense, some new functions were established.

Photos: Nissan

Global information technology is headed-up by Shozo Kurihara, vice president and chief information officer.

A global marketing team has been established, headed by senior vice president Jean-Jacques Le Goff. Purchasing, finance, manufacturing, research and development are also under global management.

Overseas, the North American and European organisations are streamlined through the appointment of Norio Matsumura, executive vice president, as head of newly formed management committees in these regions.

The management committee in Europe consists of four senior vice presidents: Mario Canavasi, sales and marketing; Kazuto Koga, manufacturing, purchasing , quality and logistics; Tsutomu Takamiya, finance and administration; and Masaki Sugisawa, research and development.

In order to strengthen global management, each regional senior vice president has dual reporting lines with accountability for regional profitability and efficiency of their respective function.

Funding growth and reducing debt

The sale of non-strategic assets contributes to the goal of reducing net automotive debt to 700 billion Yen by financial year 2002 and provides valuable funds for new products.

On March 24, Nissan announced that it will sell 25.4 million shares in Fuji Heavy Industries to the General Motors Corporation. The sale includes the entire holding of Nissan Motor Co., Ltd. in Fuji Heavy, which is a Nissan supplier for CVT technology.

On April 10, Nissan concluded negotiations for the sale of its Aerospace Division to Ishikawajima-Harima Heavy Industries Co., Ltd.

Nissan’s Aerospace Division started research on rockets in 1953. As an integrated rocket development and manufacturing division, the unit has contributed to the development in the area of solid propellant rockets for scientific sounding rockets and practical satellites.

On July 10, Nissan welcomed an offer for Ikeda Bussan Co. Ltd, by Johnson Controls Holdings, K.K. The bid for one of Nissan’s affiliate companies is an opportunity to create a partnership benefiting Ikeda Bussan, Johnson Controls and Nissan.

Both Johnson Controls and Ikeda Bussan supply Nissan with automotive seats in Japan, North America and Europe. Ikeda Bussan is an affiliate of Nissan Motor Co., Ltd, which owns 37.9 per cent of the outstanding shares.

On August 4, Nissan also announced that it has reached basic agreement to sell its domestic manufacturing, machining and assembly operation for constant velocity joint (CVJ) driveshafts to GKN Japan Ltd.

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