Nissan Motor Co. is drawing up plans to replace its chief executive officer following another dismal set of earnings and the collapse of talks to combine with Honda Motor Co., according to people familiar with the matter.
Nissan directors are gauging interest in potential candidates to succeed Makoto Uchida, the 22-year company veteran who’s been CEO since late 2019, one of the people said, asking not to be identified because the deliberations are private. Nissan declined to comment.
The carmaker’s shares climbed as much as 4.9% in Tokyo in morning trade. The company initiating Uchida’s departure suggests that it still has the capability to act in securing a survival partner, said Bloomberg Intelligence analyst Tatsuo Yoshida.
Nissan is planning to name Jeremie Papin, who was tapped in December to become chief financial officer, as Uchida’s replacement, Japanese business publication Diamond reported Thursday.
Uchida, 58, told reporters earlier this month that while he was prepared to relinquish his position if asked, he didn’t want to step down before steadying Nissan’s business. He braced investors for an ¥80 billion ($536 million) net loss for the fiscal year ending in March, a far cry from the ¥380 billion net profit he was forecasting just nine months ago.
Nissan is staring down a record debt bill coming due next year with all three major credit graders having cut its ratings to junk, following two downgrades in the last week. Uchida looked to Honda for help late last year, striking a tentative agreement to combine under a joint holding company. The carmakers called off those negotiations this month after butting heads over terms.
Honda and Nissan executives said they would still continue a strategic partnership with a third Japanese peer, Mitsubishi Motors Corp., to collaborate on electric-vehicle batteries and software development. Uchida was clear-eyed during a Feb. 13 press conference about how pivotal tie-ups will be to Nissan’s future.
“It will still be difficult to survive without leaning on future partnerships,” he told reporters.
Nissan is having trouble wooing consumers with its dated product lineup and has had to spend heavily on incentives and promotions to rein in inventory. Uchida announced plans in November to trim 9,000 jobs and a fifth of the company’s production capacity.
Finding a way forward will be complicated.
Nissan’s biggest shareholder and longtime alliance partner Renault SA was critical of the hard bargain Honda was driving over how their combination would be structured and praised Nissan for walking away. Renault has meanwhile sought to distance itself from the company, with CEO Luca de Meo saying China’s Zhejiang Geely Holding Group Co. may be a more natural partner than Nissan going forward.
Hon Hai Precision Industry Co., the maker of iPhones better known as Foxconn, approached Nissan about acquiring a stake in the company in December and said this month it was open to buying Renault’s 36% shareholding. The Taiwanese contract manufacturer is trying to establish a foothold in EV making and has had trouble convincing car companies to outsource production.
Separately, U.S. private equity firm KKR & Co. has mulled a potential equity or debt investment to improve Nissan’s financial position, Bloomberg News reported earlier this month, citing people familiar with the matter.
