Can Nissan Turn It Around? We Asked Its New CEO

Nissan is in deep trouble. The company has announced a $4.5 billion loss for the fiscal year ending March 31. As we reported earlier, it is now targeting $3.4 billion in cost reductions by closing seven of its 17 factories worldwide, reducing its total number of platforms from 13 to seven, and cutting its workforce by 15 percent. All work on new models scheduled for launch after 2026 has been temporarily paused, with 3,000 staff reportedly been moved to work on reducing parts complexity and redundancy by 70 percent.

Mexico-born Ivan Espinosa took over as Nissan CEO on April 1, becoming the third person to head the company after the shock arrest of Carlos Ghosn in 2018. A Nissan lifer—he started with Nissan Mexico as a commercial vehicle product planner in early 2003—he is under no illusions in terms of the enormity of the task ahead. A senior Nissan executive last year claimed the company had maybe 12 to 14 months to live. At the Financial Times Future of the Car Summit in London, Espinosa outlined why he believes Nissan still has a future.

MotorTrend: Can Nissan survive?

Ivan Espinosa: “Let me start by explaining why we are here. This is not something that happened in the last couple of years. It's more of a fundamental problem that probably started back in 2015 when management thought this company could reach [annual global vehicle sales] of around eight million. There were heavy investments both in terms of planned capacity as well as in human resources, but the reality today is we are running at around half that volume. And nobody did anything to fix that until now.

The moment I became CEO, I quickly reassessed the situation. That's why you saw the big impact on net income for fiscal year 2024. In the plan we announced earlier, we have three key pillars around cost reduction, around product and market strategies, and around partnerships. We are very confident with the plan and we're going to push it forward.”

MT: Nissan can do this on its own?

IE: “We need self-help. We cannot rely on anybody. The position of the company today in terms of liquidity is very different. There was a huge pile of debt and there was no cash in the bank. Today [because of restructured debt] I have more than $15 billion in the bank, plus committed lines of credit. So, the message here is we have time. The cash position of the company is good, but we have to move quickly.

MT: So, a partnership with another company is not needed?

IE: “What we're trying to do is not be a hostage to any partner. We are focusing on putting ourselves on the right footing so that we can have good negotiations and discussions with any potential partner. We are looking at partners that can bring more corporate value and support to Nissan in the long term. The future of the car is the intelligent car and Nissan has a lot of strengths and know-how in autonomous technology as well as software defined vehicles. We have a lot to offer, a lot of value and a lot of engineering value to offer, and this is what we want to discuss with potential partners.”

MT: Is Foxconn being seriously considered as a potential partner?

IE: “I'll not comment on any specific partner. We are looking at many partners—traditional OEMs, non-traditional OEMs, technology companies in China. We are very open, and we are considering many options as we speak.”

MT: What about your existing Chinese partner, Dongfeng?

IE: “Our strategy in China is to work more closely with Dongfeng. We have just launched the Nissan N7 and the Nissan Frontier Pro [an electric sedan and a PHEV pickup from the joint venture with Dongfeng], which shows how we can capitalize on our assets there. We will keep investing in product in China because the technology, the speed and the cost competitiveness is very good, and we will sell these products outside China as well. We’ve been working with Dongfeng for over 20 years, so we could consider joint work outside China, inviting them to come into our production ecosystems. Everything is open.”

MT: You've said U.S. tariffs will cost Nissan $3.1 billion annually. How big a problem is this?

IE: “We have already identified 30 percent [of that cost] that can be mitigated [in the next three months], and we are continuing to work on that. I cannot tell you where we will land, but it will be for sure more than 30 percent. Are we going to pass on [tariff increases to the customer]? It's very early to say. I would like to focus the discussion on getting clarity and stability so that we can make some decisions.”

MT: What about potential labor shortages in the U.S.?

IE: “We have a second shift established [at the Smyrna plant in Tennessee, where the Rogue and Murano are produced] and we are ramping it up as we speak. So, we are not struggling in the short term with any labor shortages. I don't know what could happen later. For the moment what we are focusing on is, as I said, getting clarity on the [tariff] rules because it's very difficult to make a decision on what is the optimum balance for our manufacturing footprint [in the U.S.].”

MT: You are reducing your global manufacturing footprint by 40 percent. Could more plant closures be in the pipeline longer term?

IE: “We are continuously reassessing the situation, and unfortunately, we don't have time to waste and resources to spend. So, we are very practical about running the business and if we cannot be competitive, we'll have to make decisions.”

Interview edited for clarity.