Nissan Vows To Fix Itself; "Not on the Offensive"
May 15, 2009
By Bill Visnic
Announcing this week a 2008 fiscal-year net loss of $2.32 billion, Nissan Motor Co. Ltd. President and CEO Carlos Ghosn said the company expects to lose about three-quarters that much again in fiscal 2009 -- so don't look for the Nissan-Renault alliance to get involved in the global auto industry's realignment of players and power.
"You will not see the (Nissan-Renault) alliance on the offensive," said Ghosn at a press conference in Japan to report Nissan's 2008 financial performance. He said Nissan's emphasis will be to return to positive cashflow, not pursue new partnerships with other automakers.
Nissan and/or Renault have been discussed as potential players in the ongoing restructurings of General Motors Corp., it's Adam Opel AG and European operations and in the pending alliance of Fiat S.p.A. and Chrysler -- a teamup that could eventually include all or part of Opel as well.
Ghosn said Nissan will stay away from dalliances that don't involve getting the company back to profitability, and Ghosn -- likely wisely -- evidently doesn't see the current spate of proposed partnerships as necessarily promising in terms of contributing to profitability.
"2009 will be another challenging year. Our priorities will be preserving cash, improving our profitability and pursuing deeper synergies within the Renault-Nissan Alliance," said Ghosn in a statement. "We are balancing short- and long-term objectives to manage through the crisis and to prepare for the future."
Nissan does have two interesting existing contracts with now-bankrupt Chrysler, and Ghosn said at the meeting nothing yet has changed. Nissan made deals to supply Chrysler with a compact car for North America and Europe (thought to be sold as the Dodge Hornet) and a rebadged version of the Nissan Versa to be distributed by Chrysler in South America.
Nissan, in turn, arranged to have Chrysler build a version of its Ram full-size pickup for Nissan to carry on its Titan nameplate.
But in February, the companies said the deals were on hold. Now Ghosn said Chrysler's bankruptcy and proposed linkup with Fiat may again change the deal.
"We signed a contract with one entity," said Ghosn of the former Chrysler LLC. "If Chrysler becomes something different, the contracts will be reviewed."
Ghosn likely refers to the plan for Chrysler's assets to be sold to Fiat in order to form a "new" Chrysler, while an "old" Chrysler will continue on as the entity that deals with the likely years-long disposition of the company's debts and other liabilities.
Details from Nissan's fiscal 2008 report (the fiscal year ended March 31, 2009):
The company's operating loss amounted to about $1.37 billion.
Nissan sold 3,411,000 vehicles worldwide (-9.5 percent) and 856,000 in the U.S. (-19.1
percent).
Sales in Japan were just 612,000, a 15.1 percent drop.
The company said it will "return to a positive free cash flow position in the year ahead," and Ghosn said Nissan will return to profitability by 2010 in the worst case.
Nissan said it projects global sales in fiscal 2009 of 3.08 million units. It also confirmed it will launch eight all-new models during the new fiscal year, including convertible variants of the G37 coupe and 370 Z sports car in North America.
Photos by Nissan
1 - Carlos Ghosn
2 - Nissan is launching the 2010 370 Z convertible late this summer.
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