Nissan CEO Makoto Uchida defends revival plan to shareholders

TOKYO — Nissan CEO Makoto Uchida tried selling the automaker’s new revival plan to skeptical shareholders last week amid an angry showdown over everything from his management style and corporate vision to board member pay and the company’s plunging share price.

Some attendees at the June 29 annual shareholders meeting even harked back wistfully to the Carlos Ghosn era: One praised the indicted former chairman’s strong leadership, another blamed his downfall on a conspiracy among Japanese prosecutors and government bureaucrats.

It was Uchida’s second faceoff with shareholders since taking office Dec. 1. An equally contentious exchange erupted in February at an extraordinary shareholders meeting called to appoint him, as the newly minted CEO, and other executives to the board of directors.

In his latest appeal, Uchida pledged that the midterm plan unveiled in May would restore the embattled carmaker to a growth trajectory, but he warned a full rebound still needed time.

One benchmark of recovery, he noted, would be a return to positive free cash flow. He predicted that would happen sometime between October 2021 and March 2022. Nissan, which just posted its first full-year net loss in 11 years, bled ¥641 billion ($5.95 billion) in cash from its core automotive business for the year. But Uchida said the net cash position is still flush enough to get the company through the COVID-19 pandemic thanks to newly secured lines of credit.

Uchida insisted the midterm plan plots a path to full recovery in four years. The plan aims to restore operating profit margin to 5 percent and increase global sales about 9 percent to 5.38 million vehicles for a 6 percent world market share. The strategy slashes costs and closes factories to reduce bloated global production capacity of 7.2 million to 5.4 million vehicles.

“What we showed you, as a forecast, is the level that is feasible, achievable, a level that we can deliver,” Uchida said of the plan, dubbed Nissan Next. “We are seeing better results, but it will take time. … I am committed to putting Nissan back on a growth track.”

Nissan hosted a slimmed-down version of its annual shareholders meeting, which usually draws thousands of people to a cavernous convention center in Yokohama. This year, as a precaution during the pandemic, Nissan allotted only 400 seats in its headquarters’ auditorium. Attendees were required to wear masks, and Nissan skipped holding a post-meeting lunch reception.

Last year, 2,814 people attended, and the meeting ran nearly three and a half hours. Only 295 turned out for this year’s gathering, and the event lasted less than two hours.