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Angered Shareholders Question Nissan CEO Competence Who Puts His Job On The Line Against Recovery


02/18/2020


Angered Shareholders Question Nissan CEO Competence Who Puts His Job On The Line Against Recovery
Nissan, Japan’s second biggest auto manufacturer, is currently struggling with slowing demand for its vehicles and consequent lower revenues and profits – ever since the scandal surrounding its former boss Carlos Ghosn. While the company has claimed to have initiated a turnaround plan, it does not seem to be bringing in any benefits currently. This has forced the company’s new chief executive to say on Tuesday that he would accept being fired if he was unable ot stage a turnaround of the company.
 
During a heated shareholders’ meeting, his job was put on the line by the new CEO Makoto Uchida himself even though he had only taken over the reign of the company in December last year. At the meeting, shareholders demand a host of measures ranging from a cut to executive pay to getting Ghosn back into the company by offering a bounty - who is currently in Lebanon after having fled Japan.
 
Developing aggressive steps to revive the company have been forced on the 53-year-old Uchida who was formally the China chief of the company, because of the performance of the company which is constantly getting worse. Uchida is the third person ot become the CEO of the company since September last year.
 
It he did not mange to improve profitability at the company, he would be ready to face dismissal, said Uchida at the meeting after he was almost heckled repeatedly by shareholders on Tuesday. The company is expected to report its worst annual operating profit in the last 11 years.
 
“We will make sure that we steer the company in an effective way so that it is visible in the eyes of viewers. I will commit to this: if the circumstances remain uncertain you can fire me immediately,” he said.
 
Not timeline was however offered by Uchida about turning around the company.
 
The two most important challenges for Uchida is to hasten a cost cutting program at the 86-year-old Japanese auto giant while also increasing profit margins and exhibit to the company’s board that the strategy that he is following will also be able to repair strained relations with its alliance partner – the French auto giant Renault, said reports quoting company sources. 
 
Uchida said that he is preparing a plan for turning the fortunes of the company around by May and asked the shareholders to exercise patience till then. He also promised a shake up in the company structure after the arrest and ouster of the company’s former boss Ghosn in Japan in November of 2018 over changes of financial misconduct.
 
“If you can be patient a little bit longer, on a day-to-day basis you will be able to sense we are changing,” he said.
 
According to reports, the ability of Uchida and other executives were questioned by angry shareholders who wondered whether the executives had the capacity to recover the fortunes of the company. They are raised questions over a host of issues such as the resignation of the ex-CEO Hiroto Saikawa, the level of transparency in the probe conducted by the company into the alleged misconduct of Ghosn and the use of Toyota vehicles for transportation of the board members.
 
(Source:www.financialpost.com)