Nissan Needs Self-Help Before Seeking Out Partners, CEO Says

Ivan Espinosa Photographer: Kiyoshi Ota/Bloomberg Photo by Kiyoshi Ota /Bloomberg

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(Bloomberg) — Nissan Motor Co. must get its own house in order before considering partnerships with other companies, Chief Executive Officer Ivan Espinosa said.

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Nissan has over ¥2.2 trillion ($15.1 billion) in the bank and committed lines of credit, Espinosa said Thursday, adding that the Japanese automaker is in a better negotiation position now than before he took over.

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“The cash position of the company is good, but we have to move quickly,” he said in comments broadcast during an auto-industry conference in London. “For the time being, we need self-help, we cannot go and rely on anybody.”

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Espinosa, 46, faces the difficult task of reversing Nissan’s fortunes after efforts to combine with larger Japanese peer Honda Motor Co. faltered earlier this year. The CEO this month accelerated a restructuring, vowing to close seven factories and slash 20,000 jobs, measures aimed at cutting costs by ¥500 billion.

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The failed Honda talks led to the ouster of ex-CEO Makoto Uchida, who’s said it will be “difficult to survive” without a partnership of some sort. Espinosa said Thursday that Nissan’s improved liquidity is strengthening its positioning in any future partnership negotiations.

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For the longer term, the company is casting a wide net as it seeks partners. It’s looking at traditional automakers and industry startups, including Chinese carmakers, and as well as technology companies, the CEO said.

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“What we are trying to do is not to be hostages of any partner,” Espinosa told attendees of the Financial Times Future of the Car summit. “What we are looking for is having the right partners for the future.”

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An expansion of Nissan’s two-decade partnership with Dongfeng Motor Group Co. is an option, with Espinosa suggesting the Japanese carmaker could team up with the state-owned company outside of China and “invite them to come into our production ecosystems.”

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One of the factories jeopardized by Nissan’s restructuring is the UK’s Sunderland plant, the country’s largest. The company has “no intention to go around Sunderland” and will build new models there, the CEO said. But Nissan has to remain “practical” and can make no guarantees about the factory’s future, he added.

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“If you bring a car from China into the UK, as a local manufacturer in the UK, you don’t have any advantage,” Espinosa said. “Things like energy and a few other things are not as competitive as they are in other markets, and we need support from the government to remain competitive in the UK.”

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—With assistance from Craig Trudell.

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(Adds comments on Sunderland plant, partnership with Dongfeng.)

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