Nissan stages dramatic recovery; posts $2.7 b net

Tokyo

NISSAN Motor Co rebounded from seven years of steep losses to record a group net profit of 331.08 billion yen ($2.68 billion) in the fiscal year ending March 31, capping the dramatic success of President Carlos Ghosn, brought in from partner and French auto maker Renault SA.

The previous year Nissan logged a massive net loss of 684.36 billion yen. Nissan said pretax profit was 282.31 billion yen after a 1.64 billion yen loss a year earlier while operating profit was 290.31 billion yen, more than triple the 82.57 billion yen posted a year earlier.

A year ago, the Japanese auto maker had recorded a loss twice that size — one of seven years of red ink in the last eight. Sales for fiscal 2000 totaled 6.090 trillion yen, up 1.9 per cent from 5.977 trillion yen the previous year.

Behind the remarkable profit performance is decisive cost-slashing by Mr Ghosn, who became chief operating officer and president after Renault took a 36.8 per cent stake in Nissan in 1999.

Mr Ghosn — nicknamed “Le Cost Killer” for his successful campaign at Renault — sold off all or parts of stakes that Nissan owned in its bloated network of affiliates, including parts-makers. Building relations with suppliers has long been a part of doing business in corporate Japan.

Instead, Nissan began to turn to global suppliers to cut costs by increasing its pricing leverage by combining forces with Renault. The Brazilian-born Mr Ghosn announced a revival plan in 1999 centered around the closing of five plants and cutting 21,000 jobs.

-- The Wall Street Journal