Managing Operating Exposure and FX Risk at Nissan

KUGY tried to adapt production to such a level where our team would not have any car in stock at the end of each business year and normally succeeded in this concern with minor exceptions. Moreover KUGY tried to decrease its labour cost and invest in automation instead. Our team decided it will suit our company strategy and image and to have three extremely technologized production plants, with small but very skilled labour forces.

High cost of internal supplies GM’s decline can also be concluded by the failure of cost cut. As sales decline, variable costs, manufacturing costs and material purchases should also be reduced. However, since GM has significant fixed costs, for instance the pensions and healthcare costs, it has been difficult to do costs cut in a successful way. As a result, the total costs of GM remain much higher than the one of its competitors.

The effect of changes in the economic environment has an effect on Nissan UK. This has been shown in the way the economy has been changing recently. The changes in the economic environment are going to show its effects on Nissan UK. This is going to be shown in the number of sales they are making. The economic review for December 2011 shows how the manufacturing output

The American auto industry has faced several challenges in the recent years. GM was the

A large concern of the organization is long-term cost savings and developing a better marketing strategy. The cost of using various vehicles, increased gas prices caused by the economic downturn, and maintenance of these vehicles will produce a long-term debt versus

Achieving world class business performance is a major challenge in today’s society. Manufacturing companies continue to face increased competition and globalization from its competitors. (1, p. 148). The automotive industry is one of the most volatile manufacturing industries that we have, which was evident in the 2008 – 2010 automotive industry crisis. (2) This global financial downturn served notice to the American automotive manufactures to raise the bar, in order to achieve word class business performance. General Motors, one of the country’s largest automotive manufactures, had to receive a government bailout to survive. During this time many with the corporation asked themselves, if we were a world class business, would we be facing

General Motors is the crucial three is the greatest automakers within the United States and Canada and is normally distinguished by their prevailing size, geography and business model. General Motors operations are normally unionized thereby consequential to the elevated labor costs as compared to the other existing international automakers in the North America. General Motors at one period picked up the whole cost of funding health insurance premiums of its prevailing workers, their survivors and the corresponding General Motors retirees since the United States did not possess worldwide health care system (Kent & Gerald, 2011). The constant fluctuation sales and market share have made General Motors to function below its capability. In the year 2005, it functioned at eighty five percent which consequently led to the manufacture cuts, plants shutting down and layoffs. General Motors commonly depend massively on incentives and subsidies charters to dispose vehicles. This is normally significant in maintaining the operation of the plant which subsequently propelled importance section of the Michigan financial system (Leonard & Melvyn, 2006).

General Motors is one of the world's most dominant automakers from 1931. After 1980s economic recession the main goal for automobile companies was cost reduction. Customers became more price-sensitive. Also Japanese competitors came into market with the new effective system of production. So market was highly competitive and directed toward price reduction. The case states that in 1991 GM suffered $ 4.5 billion losses and most part of the costs of manufacturing was due to purchased components. GM NA hired Lopez in order to find the way from "extraordinary" situation and reduce costs.

General Motors is one of the world's most dominant automakers from 1931. After 1980s economic recession the main goal for automobile companies was cost reduction. Customers became more price-sensitive. Also Japanese competitors came into market with the new effective system of production. So market was highly competitive and directed toward price reduction. The case states that in 1991 GM suffered $ 4.5 billion losses and most part of the costs of manufacturing was due to purchased components. GM NA hired Lopez in order to find the way from "extraordinary" situation and reduce costs.

The automotive industry is characterised by high levels of uncertainty, creating difficulties for companies to follow prescriptive strategies. Many factors contribute to this unpredictability. Pertinently, the financial crisis created instability: between 2008-2009 the Western automobile market worth fell by $300billion. Damaging profitability and cash flows, creating excess supply. In 2007 worldwide production capacity of cars was over 70million although demand was less than 60million (De Moraes, 2016).

Due to the devastating economic crisis in 2008, American automobile industry suffered a disastrous period. In particular, the sales volume of Chrysler went down 30.3% compared to 2007. Without doubt, Chrysler had the most terrible performance among the three giant native auto companies in North American while its market share declined to about 10%. Meanwhile, the cost of Chrysler was related high, which led Chrysler has less competitiveness. In addition, Chrysler also had heavy liabilities, and it made Chrysler’s financial situation worse.

Ghosn’s plan to combine, centralize, and globalize Nissan and Renault’s parts procurement would cut costs by 20 percent! Before this change, Ghosn estimated Nissan’s parts procurement costs were around 10 percent higher than Renault’s. To accomplish his goal, Ghosn had to prove that the precious keiretsu system of Japan was promoting

In 2009, Chrysler and General Motors has filed for bankruptcy protection. As part of the reconstruction process the automobile company Fiat merged with Chrysler. Because of the restructuring proceeding, almost 800 dealerships had to be closed, employees’ wages were slashed and pensions for new hires were cut. The reorganization of the two failing companies resulted in lowered variable and fixed costs at a disadvantage to its creditors, employees, dealers, and management. The new management set out to improve the culture of

The constant involvement to the workshops hampered its profitability level as the cost of operations increased. The company’s expansion strategy depends on its ability to increase the awareness process and ensure that it commands the global market. Chrysler performances have been affected by the cross-cultural focus and the need to implement strategies that will change the management’s sentiment and the understanding of the cultural perspectives in the economy (Business Week New York, 2007). The level of competition in the automotive industry has also increased, and without effective policies and strategies, the entity’s success will be hampered. The workshops that were conducted after the merger had failed did not yield the results as expected and it was an additional cost to the operations of the entity (Isidore, 2007).

During March 1999, Brazilian Carlos Ghosn took over as the first non-Japanese Chief Operating Officer of Nissan, when Nissan had been incurring losses for seven of the prior eight years. Many of the industry analysts expected a culture clash between the French leadership style and his new Japanese employees. Analysts said, because the financial situation at Nissan had become critical so the decision to bring Ghosn in came at the worst possible time. The continuing losses were resulting in debts (approximately $22 billion) that were shaking the confidence of suppliers and financiers alike. Furthermore, the Nissan brand was weakening in the minds of consumers due to a product