Nissan, Renault and Mitsubishi are to scale back models, close factories and lay off employees. They are trying to cut $5bn in fixed costs and plan to shed at minimum 27,500 jobs in the upcoming years. Companies are looking at reducing back production capacity by about 20 per cent to a combined 8.7m vehicles a year by 2024.
A new “leader-follower” system puts one group in charge of the production of particular models and regions in an attempt to play to each company’s strengths.
Jean-Dominique Senard, Renault’s chairman, agrees that the previous attempts to divide work between the businesses led to “a tremendous amount of mess in terms of going back and forth in meetings and all the rest where they decide nothing”.
For the two companies struggling to stem the cash drain caused by the global halt to car sales, executives say the new framework is the “best available option” for the alliance. If it works, the alliance, which was once the car industry’s largest, will come through the current crisis intact. If not, a split seems all but inevitable, forcing them to find new partners — or acquirers.