Nissan's new COO promised to close five factories and hit profit in a year

Nissan's global market share had fallen from 6.6% in 1991 to 4.9% in 1998, the company had posted a net loss in seven of the previous eleven fiscal years, and it carried roughly ¥2 trillion in net debt, according to Nissan's own investor presentation from the period. Renault took a 36.8% equity stake in Nissan for ¥605 billion in March 1999 and sent Carlos Ghosn to Tokyo as chief operating officer.

On October 18, 1999, Ghosn announced the Nissan Revival Plan with explicit, dated targets rather than vague commitments: return to profitability by fiscal year 2000, cut net debt in half by fiscal year 2002, and reach an operating margin of at least 4.5% of sales by the same year. The plan closed five factories in Japan, including three assembly plants and two powertrain plants, and cut 21,000 jobs, about 14% of the global workforce, while also breaking with Nissan's traditional keiretsu supplier relationships to cut purchasing costs by a combined total of about ¥1 trillion.

Nissan's own results confirm the plan worked ahead of its own schedule. Fiscal year 2000 net profit reached ¥331.1 billion, reversing a ¥684.36 billion net loss the year before, with operating profit up 251.6% to ¥290.3 billion, and Nissan announced the Revival Plan's targets had been met a full year early.

Ghosn set dated numerical targets, closed five named factories, and broke keiretsu supplier ties, cutting costs ¥1 trillion and hitting profit a year early.

Publishing specific, dated numerical targets rather than a general promise gave employees, suppliers and investors a concrete standard to measure progress against, not a vague pledge to improve.

Closing named factories rather than announcing generic cost cuts forced the reduction to be real and immediate, since a named closure can't be quietly walked back the way a percentage target can.

Breaking the keiretsu supplier system let Nissan actually negotiate purchasing costs down, something loyalty-based, non-competitive supplier relationships had made difficult before.

When a company needs outside intervention to survive, replacing vague turnaround language with specific, dated, publicly stated targets can force faster execution than a general commitment to improve.

Nissan's net profit reached ¥331.1 billion in fiscal year 2000, reversing a ¥684.36 billion loss the year before, and the company announced the Nissan Revival Plan's targets were met a full year ahead of schedule, according to its own results. The plan became one of the most widely cited corporate turnarounds in the automotive industry, and the Renault-Nissan alliance it created continued, with later additions including Mitsubishi Motors, as one of the world's largest automotive groupings for two decades after.