Nissan’s enterprise value has dwindled almost to nothing. — Bloomberg
IN retrospect, you can put a date on the moment globalisation peaked: Jan 24, 2018.
In the rarefied winter air of Davos, Switzerland, Carlos Ghosn – then boss of the sprawling alliance of Nissan Motor Co, Renault SA, and Mitsubishi Motors Corp – was asked what he thought of a tentative initial round of tariffs on washing machines and solar panels imposed by President Donald Trump.
Flush with the confidence of delivering sales results confirming the alliance was the world’s biggest car group by volume, and with his eye on a unification of the business under a single corporate roof, he seemed untroubled.
“I don’t see anything that is going to lead to a heavy significant burst of protectionism,” he told Bloomberg Television.
The tectonic plates were already shifting. Within weeks, Nissan insiders had started the internal investigations that would lead to his arrest later that year and dramatic escape from Japan in 2019.
The fractured group has since spent the best part of a decade trying and failing to finalise the separation of its French and Japanese limbs.
With Nissan’s announcement of a US$4.5bil loss Wednesday alongside a promise to close seven of its 17 factories, one of the world’s great carmakers may be approaching its endgame.
That’s certainly the judgment of investors. The stock is now trading like scrap metal, at less than a quarter of the value of the assets on its books. Its debt is also junk, in the view of all three major ratings companies.
Its 1.3 trillion yen market cap is less than the 1.5 trillion yen value of its net cash. If you bought Nissan shares at almost any time since 1975, you would currently be sitting on paper losses.
Nissan’s enterprise value has dwindled almost to nothing.
New chief executive officer Ivan Espinosa, just months into the job after his predecessor Makoto Uchida stepped down following an abortive merger attempt with Honda Motor Co, is touting the company’s third restructuring plan in five years.
It’s mostly a reheated version of the last programme Uchida put forward. It won’t be enough to stanch the bleeding. — Bloomberg
David Fickling is a Bloomberg Opinion columnist. The views expressed here are the writer’s own.
