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Nissan’s new chief pledges to transform the troubled automaker

Makoto Uchida, New Nissan Motor Co. President, pledged to transform the troubled automaker that has been in a downward spiral since last year’s arrest of former Chairman Carlos Ghosn.

The firm’s goal is to break away from the two-decade Ghosn era, marked by a top-down structure that consolidated power with the charismatic leader. Instead, with a new three-pronged management structure, the company wants to place more emphasis on collective leadership.

But it remains to be seen whether Nissan’s gambit can pay off as the new leaders face numerous daunting obstacles such as falling revenues, strained ties with French alliance partner Renault SA, and worrying corporate governance.

“I honestly say that. Nissan is in a challenging situation, “said Monday at the company headquarters in Yokohama, Uchida— who began his new role Sunday — during his inaugural news conference.

Nissan has two other new leaders in addition to Uchida. Former corporation of Mitsubishi Motors. COO Ashwani Gupta was named COO, and Jun Seki, who was Nissan’s senior vice president, is now the vice president.

Uchida said he would work closely with Gupta and Seki under the new structure introduced Monday. He added that although a three-person structure has been reported to slow down decision-making, he believes this is not going to be the case.

Gupta and Seki also made short speeches at the news conference in an apparent attempt to illustrate the unity of the three leaders.

According to a panel of experts commissioned by Nissan to come up with changes to its corporate governance, the troika system is intended to prevent a single leader from exerting excessive power, as Ghosn was seen to do.

“Given the current situation, it may be true that Nissan needs strong leadership, but at the same time there are suggestions to the contrary,” Yasushi Kimura, who chairs the board of Nissan, said in October after the company announced the new leaders.

Kimura said the collective leadership is going to encourage friendly competition among top officials, who will also help each other. It is hoped that the management system will be more open and make fairer decisions, added Kimura.

Uchida also said he intended to reform the corporate culture of Nissan, in which the company set some unsuccessful business goals and focused more on short-term profit, which resulted in backfiring.

In the April-September period, Nissan’s operating profit plummeted by 85 per cent to 31.6 billion yen compared to the same period last year. It’s declining unit sales in all major global markets. The automaker also revised its full-year operating and net profit outlook down to 150 billion yen and 110 billion yen, respectively, from 230 billion yen and 170 billion yen.

Uchida also stressed the importance of the alliance with Renault and Mitsubishi Motors as a means to survive the industry’s changing competitive environment, where the know-how and technology needed to produce environmentally friendly vehicles and develop autonomous driving will be essential.

“The partnership is invaluable as we plan to transform the company around and for more achievements,” Uchida said.

Asked what he thinks of Renault pursuing a merger with Nissan, Uchida said at this stage he is not thinking at all about that possibility with Renault because he believes that the partners in the partnership first need to identify issues that each face.

Kimura said that Uchida, Gupta, and Seki all share an understanding that it is critical to maintain and strengthen the alliance.

Because Gupta is a former Mitsubishi Motors COO and originally from Renault, the alliance’s latest three-pronged structure may be designed to maintain harmony. After Ghosn’s departure, who was the glue that held it together, the tie-up has been somewhat strained.

In November 2018, Ghosn was arrested for allegedly underreporting his salary. He denies any wrongdoing. Hiroto Saikawa took over the leadership but was hit by allegations that he was overpaid, forcing him in September to step down.

Nissan formed a selection committee to select directors to improve its corporate governance. Out of some ten contestants, Uchida was picked.

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