* Uchida has only a few months to show that he is making progress – sources
* Some board members complain that the new CEO is working too slowly
* He has set himself the plan to effectively withdraw from Indonesian sources
* Nissan rejects suggestions about the new CEO’s uncertain situation
* Some Uchida followers emphasize that Nissan’s suffering did not come from him
By Norihiko Shirouzu
Tokyo, February 17 (Reuters) – Nissan’s new CEO Makoto Uchida doesn’t have time to work his way into the job. He is on parole and has a few months to show that he can revive the battered automaker, three people familiar with the thinking of some of the company’s board members.
The mission: The new boss must prove to the board that he can accelerate the cost reduction and rebuild the profits of the 86-year-old Japanese giant and that he has the right strategy to repair his partnership with the French Renault, sources told Reuters With.
Pressure intensified on Thursday as Nissan, which had been in turmoil for a year since the longtime leader Carlos Ghosn was arrested and released, posted its first quarterly net loss in almost a decade and lowered its annual earnings forecast.
One of those familiar with the intentions of some members of Nissan’s 10-member board said that an assessment of Uchida’s efforts and a decision about its future would likely be taken mid-year.
“Probation is more or less the right way to describe the situation that Uchida is facing, if not more seriously,” the source said this week.
“In the worst case, the door could be shown to him.”
Uchida referred Reuters requests to Nissan if he had only a few months to demonstrate that he could turn the car maker over, whether the board members were satisfied with his work and his relationship with other executives.
The company rejected Uchida’s unsafe circumstances as “without factual basis.” “Uchida is absolutely not on parole, effectively or otherwise,” added a Yokohama spokesman. “There is no such concept or system within Nissan to put a CEO on probation. He is the CEO.”
Some proponents also stressed that Uchida has only been in the top job for just over two months, while Nissan’s business has been declining since 2017. Executives and analysts have previously said that the company’s current problems are not from Uchida, but the consequences are from an aggressive and poorly accomplished global expansion under Ghosn and Uchida’s predecessor Hiroto Saikawa.
“Nissan is on the right path to recovery … although this could be a gradual process,” Uchida, formerly Nissan’s China boss, said in a video message to employees in October, shortly after he was appointed CEO.
Still, it was a difficult start for the new CEO, who officially took the helm in early December and must act quickly to counter a decline in sales that is accelerating in key markets such as the United States and China.
When he took the stage at corporate headquarters in Yokohama earlier this month, Uchida and his senior executives – # 2 Ashwani Gupta and # 3 Jun Seki – billed as a tight “one team” that was a shining new dawn for the United States could supply automakers.
Later in December, two board members sat down with Uchida – whose survey was refused in some areas – to tell him that he needed more consultation with Seki and Gupta, and stressed that he was on the condition that he worked closely with The couple received the top job according to two of the sources.
However, the “one team” has not shown much unity.
Seki resigned at the end of December and joined the electric motor manufacturer Nidec Corp as president.
According to two sources, chief operating officer Gupta, meanwhile, has had private conversations with colleagues about a dysfunctional working relationship with the new CEO, but is determined to work with Uchida to turn Nissan over.
A source said the board would not tolerate internal quarrels or delays between Uchida, Gupta and the rest of the leadership team: “The biggest problem is that nothing is being done at a time when we need to take decisive action.”
Gupta referred Reuters requests to Nissan, who said Uchida and Gupta “worked closely together, exchanged information, and are engaged in implementing the recovery plan and other reform measures, including fixed cost reductions.”
Nissan, Japan’s second largest automaker after Toyota, faces a number of structural issues, from high fixed costs to poor management to a tense partnership with Renault that dissolved after Ghosn’s arrest in late 2018.
The problems arise at a crucial time when Nissan and other automakers are trying to manage a major and costly technological shift towards electric and self-driving vehicles.
The automaker reported a net loss of 26.1 billion yen ($ 238 million) for the third quarter from October to December, and lowered its annual operating profit forecast by 43% to 85 billion yen.
Although Nissan expects a small profit for the year ending March, some executives fear that, according to sources, a loss could occur, especially given the fact that the forecast does not take into account the impact on sales in China and beyond from the corona virus Outbreak.
Uchida said at the results media conference on Thursday that Nissan was considering the possibility of accelerating existing restructuring plans and implementing additional measures. However, he added that the company could not provide details of these additional steps until May.
GRAPHIC-Nissan sales problems: https://tmsnrt.rs/2TWHyfl
Recovery goals from GRAPHIC-2023: https://tmsnrt.rs/38CJJsw
Uchida replaced Saikawa, who resigned in September after admitting he was wrongly overpaid. His appointment was controversial, and some members of the board’s six-member nomination committee pushed for Seki or Gupta, according to two sources.
In fact, Seki received the most first-choice votes – three – but no majority, which led to another round that took the second preferences into account. Uchida received five second-vote votes and won the job, people said.
Until mid-January, however, some board members regretted the decision, the sources said. While Uchida announced a fresh start in his speech in December, he has not yet released any details of the strategy publicly.
Some board members complained that he had even participated in some of the turnaround measures worked out by Nissan executives last year before taking charge of the company.
A team led by Seki, which was tasked with formulating a series of turnaround measures, had suggested, according to a separate source near this team, to effectively withdraw from Indonesia, where the Nissan Group’s market share fell below 2% in 2018.
As part of the plan, the company would ask partner Mitsubishi, an SUV powerhouse in Southeast Asia, to commission Nissan cars and help with marketing in Indonesia, the person said.
However, when Uchida became CEO, he took a cautious stance and made no decisions about this proposed retreat, although the idea has recently gained momentum after Uchida’s subordinates and the board have put a lot of pressure on the source.
In November, Seki’s team also suggested that Nissan go into a more intense “crisis mode” and significantly tighten spending cuts, including significant cuts in year-end bonuses for top executives, the source said, adding that the proposals had not been implemented under Uchida ,
(Reporting by Norihiko Shirouzu; editing by Pravin Char)