Nissan is tightening its belt. Under the leadership of new CEO Ivan Espinosa, the Japanese automaker is implementing drastic cost-cutting measures to recover from a $4.5 billion annual loss. The plan? Massive layoffs, product delays, asset sales—and now, asking suppliers to accept IOUs in exchange for quick cash relief.
According to a report by Reuters, Nissan has begun reaching out to suppliers in the UK and Europe, proposing that they delay payments in exchange for interest-bearing arrangements. In some cases, the automaker is offering an alternative: HSBC Bank will pay the supplier immediately, and Nissan will repay HSBC at a later date with interest.
Delaying Payments to Free Up Cash
The request is part of a broader attempt to free up $69 million in short-term liquidity. While the move may seem drastic, it’s a fairly common strategy among automakers during restructuring phases.
Despite having $15 billion in cash reserves, Nissan is under significant pressure, with nearly $5 billion in debt coming due. These short-term obligations are forcing the company to make aggressive moves, including considering the sale of its $700 million Yokohama headquarters, which it may lease back after selling.
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$3.4 Billion in Cuts Over Two Years
Espinosa has set a target of $3.4 billion in cost reductions over the next two fiscal years. The strategy includes:
- Mass layoffs in several markets
- Pausing development of non-critical new models
- Supplier payment restructuring
- Asset liquidation, including real estate
While such moves are often unpopular, they reflect Nissan’s urgent need to stabilize its finances following a prolonged period of losses, stagnation, and failed partnerships.
After Honda Merger Talks Failed
Nissan’s recent attempt to merge with Honda reportedly collapsed earlier this year. The failed talks underscored the urgency with which Nissan is seeking strategic allies or internal transformation to remain competitive in a fast-evolving industry increasingly shaped by electrification and consolidation.
Not Giving Up on New Products
Despite its financial woes, Nissan is not halting all development. In fact, it recently:
- Unveiled a new-generation Leaf EV, signaling commitment to the electric segment
- Launched the Renault 5–based Micra in Europe
- Teased a revival of the Nissan Xterra, intended to challenge the Toyota 4Runner in the off-road SUV segment
This dual strategy—cost-cutting behind the scenes, product innovation in front—shows Nissan is determined to remain relevant, even as it battles mounting challenges in the global auto market.
Conclusion
Nissan’s turnaround effort is a high-stakes gamble. From supplier IOUs to a potential HQ sale, the brand is leveraging every tool it has to stay liquid, cut costs, and reposition itself for future growth. Whether this strategy pays off remains to be seen, but one thing is clear: under Ivan Espinosa’s leadership, Nissan is not sitting idle.
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