Nissan Returns To Profitability; CEO Vows To Succeed Or Resign

ByBridgeNews Japan's Nissan Motor Co. Ltd. said Oct. 30 it has rebounded from years of heavy losses and returned to profitability in the six months to September under a painful revival plan. Nissan revised its consolidated operating profit forecast up to 136.6 billion yen (US$1.2 billion) for the first half of the 2000 financial year. Nissan attributed the expected growth in profits to substantial cost savings on purchases and improved worldwide sales of profitable vehicles under a program known as the "Nissan revival plan," which included plant closings and layoffs. "The preliminary figures illustrate Nissan's highest achievement in the last 10 years and are more than twice as high as last year's first half," Carlos Ghosn, Nissan's president says. "And it is fair to say that this is only a beginning." Ghosn says he would resign if he does not return Nissan to profit in the full year to March 2001. During the first sixth months of fiscal 2000, Nissan reduced its net automotive debt by 200 billion yen from earlier estimates to 1.15 trillion yen, compared with previous year's 1.35 trillion yen. The volume forecast for vehicle sales in Japan for fiscal 2000 was dropped to 745,000 cars from an earlier estimated 755,000 cars, while sales outlook in Europe and the United States remained nearly unchanged. The company, however, expected other market sales growth to bring the worldwide total vehicle sales forecast to 2.715 million cars from earlier estimated 2.674 million cars. Nissan had sold 2.517 million cars in the previous year. "Significant profitability in fiscal year 2000 will be achieved, and we are confident today that we will also achieve both the debt and the operating margin commitment by fiscal year 2002," Ghosn says. Nissan plans to officially announce first-half fiscal 2000 business results on Nov. 20.