Add in the looming threat of new tariffs from the US, and things at Nissan aren't great.
To counter this, new Nissan CEO Ivan Espinosa is said to be planning massive job cuts and factory closures to dramatically snip costs, and now the next move seems to be deferring payments to suppliers again, which Nissan had already previously done this year.
Nissan Is A Ship Leaking Cash... And Internal Documents
According to internal documents viewed by Reuters, Nissan is reportedly offering its UK and European suppliers a deal to either accept payments on-time as planned with the help of an outside bank (and Nissan later paying the bank back with interest), or defer payments until a later date with Nissan paying back added interest on top to the suppliers. Either way, it means Nissan doesn't want to make payments now to save short-term cash, and will ultimately end up paying more than planned either way suppliers choose to go.
How Much Does Nissan Expect To Save?
One email reportedly showed a "purchasing task" requirement of around $150 million euros, with a director in the Nissan treasury department suggesting deferring supplier payments to July or later, which would be the start of the second quarter of the fiscal year. Reuters reports that Nissan's plan seems to be to defer June payments to August 15, with some payments pushed further back to September. Reuters also reports that deferring supplier payments is not that uncommon of a practice for the industry, and Nissan did it previously as recently as March. It's not an ominous sign of the end times for the automaker just yet. But it's certainly not a good look with everything else going on.
Cuts Elsewhere
Another internal document from October 2024 viewed by Reuters shows Nissan is interested in boosting its free cash flow by up to 59 million euros by extending payments with a group of a dozen companies located in the UK and Europe. It's not clear if suppliers in other markets are also being targeted by the deferred payment scheme, but internal documents from Nissan highlighted its Indian suppliers as a potential for further short-term cost savings. In Japan, Nissan has already been caught underpaying some suppliers, which it has since reportedly remedied. It's also been reported that Nissan is now asking for voluntary job cuts along with its announced 15% workforce reduction goal.
Nissan's reported goal now is to achieve positive free cash flow by 2026. For the first quarter of this fiscal year, the automaker expects to record negative free cash flow of 550 billion yen, or about $3.8 billion, which has grown from 303 billion yen last year. So the brand needs to turn things around quickly to meet that fresh target in the next fiscal year.
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