Nissan Just Did The Hardest Thing It’s Ever Had To Do

In many corporate cultures, blame is the one currency that’s easy to give but difficult to hold. Who is really to blame for Nissan’s woes and, more pointedly, for the hard decisions the company now has to make? I think it’s important to reflect on this as the current CEO decides to make a change that, up until recently, seemed almost impossible.

This Morning Dump is going to weigh what it says very carefully, because my instinct is to praise Nissan leadership for making the hard choices. At the same time, the fallout from these decisions will fall hardest on the people least to blame. Making the “hard choices” is easier when you’re making millions of dollars no matter what.

Who to blame for inflation? For a long time, some of the biggest contributors to inflation were cars and car-related services like insurance. Now the opposite is happening. Who gets credit for that? Tesla goes to trial in Florida over a tragic death involving the car’s autopilot system and there, too, is a place to talk about blame.

At least with Stellantis, the blame game is a little easier, as all the people who left under the Tavares regime start returning.

Nissan’s History In The Oppama Plant, Which Is Why It’s Wild They’re Closing It

Back in 1961, Nissan was at the start of a post-war resurgence that would peak somewhere around 1996. The vehicle that Americans probably most associate with Nissan (then Datsun) of that era is the 240Z. For car enthusiasts and everyone else, it’s probably the Datsun Bluebird. This was a reliable, compact, and attractive sedan/coupe/wagon/truck that would underpin the company’s global expansion.

This car was built at the then-high-tech Oppama plant in Fukuoka Prefecture. It was a longtime symbol for the Japanese company and is, even today, the flagship plant for the company. In spite of the success of our NV200 Taxi, the actual NV200 is only marginally popular, and so it doesn’t make sense to keep that plant open. Where is it built? You guessed it: Oppama.

And now this iconic factory is being closed. Or, eventually, it’s being closed. Here’s what Nissan put out this morning:

This decision applies solely to the Oppama plant within the Oppama district. Other facilities and functions in the district—such as the Nissan Research Center, GRANDRIVE, the crash test facility, and Oppama Wharf—will remain unaffected and continue operations as usual.

Nissan CEO Ivan Espinosa stated, “Today, Nissan made a tough but necessary decision. It wasn’t easy—for me or for the company—but I believe it’s a vital step toward overcoming our current challenges and building a sustainable future. The Oppama Plant is a proud part of our history, and its legacy will endure. I want to sincerely thank our employees, the local community, and our partners who have supported this plant with dedication and heart. We will continue to operate in the Oppama area with strong support for the local community, as we carry forward the spirit of Oppama plant and work to restore Nissan’s true value.”

Regarding the future utilization of the Oppama plant after production ends, Nissan will explore a wide range of options to determine the most appropriate path forward. Employees currently working at the Oppama plant will remain in their employment until the end of fiscal year 2027. To address concerns regarding employment and work arrangements beyond that point, the company will establish clear policies, communicate them to affected employees, and initiate discussions with the union promptly once decisions are finalized.

FY2027 is actually 2028, so that gives workers some time (in theory, it also gives Nissan time to save it, but that seems remote now). I know it’s hard to imagine, but this is a good thing. The biggest reason why Honda walked away from the Nissan deal is that, reportedly, Nissan didn’t want to make any tough choices about its business operations (for Nissan’s part, there wasn’t a lot of interest in being a subsidiary of Honda). Right now, Oppama is at about 60% utilization according to the company, and Nissan really needs its plants closer to 100%.

How much credit should we give new CEO Espinosa for making this decision? Or, to put it another way, how much blame should we lay at his feet? This will be destructive for the lives of the plant workers, their families, and the local community. Espinosa will get millions of dollars, probably, while all this happens.

Espinosa has been with the company for years, but has hardly been an executive at a high enough level to swing Nissan’s fortunes one way or the other. It’s his decision as a leader, but I don’t think you can really pin it on him. Could you blame Carlos Ghosn, then? The once heralded exec took the company on a path that resulted in a lot of products that, currently, aren’t exactly lighting up the market. Maybe you should blame the Nissan employees who, allegedly, conspired to have Ghosn arrested for trying to (maybe) merge the company more fully with Renault?

Or perhaps it’s the Renault deal that made this inevitable. Or, equally, maybe the Renault deal stalled this from happening for years, and it’s the Nissan board of the 1990s that allowed the company to overextend itself during the Bubble Era. I don’t know.

This is the difficulty of blame. It’s not one thing that did Nissan in, but rather a confluence of external and internal factors.

Inflation Is Down, Thanks To Cars

I am maybe on “Team Transitory,” which is a nonsense phrase if you don’t follow economics podcasts or the market. Basically, the idea was/is that the inflation caused by pandemic consumer and government spending, as well as supply disruptions, was going to go away mostly on its own, and that placing the blame on, say, President Biden for making eggs more expensive, was kind of missing the point.

Inflation continues to go down, and we can thank cars, sort of. From Bloomberg:

Goods prices, excluding food and energy commodities, rose 0.2% after stalling in the prior month. Categories that are more exposed to tariffs, including toys, furniture, appliances and apparel, showed strength, suggesting companies are starting to pass higher import costs on to consumers. Meantime, prices of new and used cars declined.

Oh, neat. Especially given that cars were such a big cause of inflation going up.

There’s another side to this, though:

Inflation Insights LLC President Omair Sharif pointed out that excluding cars, core goods prices climbed 0.55% in June — the biggest monthly advance since November 2021. “Today’s report showed that tariffs are beginning to bite,” he said in a note.

However, the slew of below-forecast inflation readings raises questions as to how broadly President Donald Trump’s tariffs will impact consumer prices. Some companies have been able to shield customers by stocking up on inventories ahead of the levies or absorbing part of the higher costs at the expense of lower margins.

I guess what I’m saying is: I’m transitory transitoriness.

Tesla’s Autopilot Is Going On Trial

There haven’t been a lot of trials over Tesla’s “Autopilot,” mostly because Tesla has often settled cases. Tesla’s stance is, usually, that drivers are making some sort of mistake when “Autopilot” or “FSD” is being used, and the company isn’t to blame because it officially says that you need to pay attention when using the technology.

The rub here is that CEO Elon Musk and Tesla can make it sound like the cars are able to drive themselves.

There’s a big trial in Florida involving a driver in a Tesla using the software who, briefly, went to look for her dropped phone when the car decided to veer into a parked vehicle. One woman was killed and another person was seriously injured. NPR breaks it down:

Lawyers for the plaintiffs accuse the company of overpromising what its technology can do in order to sell cars.

“Tesla advertised Autopilot in a way that greatly exaggerated its capabilities and hid its deficiencies,” they say in court filings, “encouraging Tesla drivers to over-rely on its Autopilot system.”

It’ll be interesting to see how this turns out.

Stellantis Continues To Get The Band Back Together

Ex-Stellantis CEO Carlos Tavares, pictured above, got $26 million for his work at the company. That work seemed to consist largely of pissing everyone off and driving away talented people. Now that Tavares is gone, more and more employees are coming back.

Per Automotive News:

Jason Stoicevich, who previously led Stellantis’ Canada operations and U.S. retail sales before leaving in May 2024, has returned to the company.

A spokesperson confirmed that Stoicevich is now responsible for dealer strategy and performance in North America.

Stoicevich returned to the company July 14 and will report to Tim Kuniskis, who was named head of American brands, North America marketing and retail strategy this month.

It’s a hard job, but it might be easier with the current leadership.

What I’m Listening To While Writing TMD

The Big Question

Who is to blame for Nissan’s woes?

Top graphic image: Nissan