What's next for DEI? Nissan policy changes mark another 'anti-woke' win
As Nissan CEO Makoto Uchida said during a November investor’s meeting, the company needs to get back on “the growth track," and for the troubled automaker, that means cuts.
But decreasing global production capacity 20% and slashing at least 9,000 jobs worldwide leading into the company’s 2026 merger with Honda wasn't enough.
The most recent cost reduction came in the form of slashing diversity, equity and inclusion policies.
Nashville-based conservative influencer Robby Starbuck took on the 91-year-old automaker for its DEI initiatives in late December. Starbuck's social media attack is the latest in a long line of U.S. corporations that he has successfully pressured to reverse DEI policies. Others include McDonald’s, John Deere and Tractor Supply Co.
In response, outgoing chairman of Nissan Americas Jeremie Papin confirmed that the company backed away from its DEI policy in a letter sent to employees on Dec. 18, Bloomberg reported.
Nissan reportedly slashed partnerships with organizations that are “heavily focused on political activism" and refocused employee training programs on "core business objectives" while creating a formal process for the review of marketing partnerships to “ensure that they align with business priorities.”
Papin's letter emphasized that there are no “quotas for hiring, promotions or selections of suppliers to work with Nissan.”
Starbuck cheered the news.
“We’ve got no more woke trainings. We’ve got no more woke partnerships, promotions or ads. We’ve got no more sponsorship of crazy events," Starbuck said in a video posted to social media. "We’ve got them going back to being a car company, embracing corporate neutrality on divisive issues and reminding employees that it will be merit going forward that lifts them up in their workplace. Shareholders should celebrate these days."
A Nissan spokesperson told The Tennessean that the company maintains a commitment to inclusion amid the reported policy changes.
“Whether with employees, customers, business partners, or the communities we serve, we believe that Nissan is a company for everyone,” Nissan officials said, in a written statement. “For nearly four decades, our commitment to respect and inclusion has been rooted in our values (and) shaped an environment where each of our team members can contribute at work, and ultimately contribute to the success of our business.”
Why companies like Nissan are bending to anti-DEI efforts
Pressure has been mounting against Nissan over the last two years — from the rising success of Chinese competitors and a shifting electric vehicle industry to declining profits and corporate restructuring enacted to stop them. Since 2023, the automotive manufacturer's top shareholder Renault has also divested from the company three separate times.
In times of financial hardship, University of Tennessee business professor Timothy Munyon said companies will look to cut nonessential costs, like for example, DEI programs.
According to the Harvard Kennedy School, U.S. companies spend roughly $8 billion annually, on average, on DEI efforts.
"When we think about the values of diversity, equity and inclusion, it means that we want a place where everyone is welcome, where everyone is treated fairly, and people feel like they belong," Munyon said. "Now, I don't think there's anyone that questions that those are important priorities."
The challenge, he said, is in quantifying meaningful workplace improvements from DEI initiatives.
Munyon said companies will often point to a broadly defined percentage increase of underrepresented groups employed as a "DEI success" without explaining why those numbers matter or how they were fairly reached.
"The problem often becomes with implementation," he said. "Not only are companies not assessing the ROI (return on investment) or the bottom line proposition of their DEI programs, but they're also emphasizing the easily observable proxies of success."
Thus, when public pressure to rollback DEI efforts comes along, companies are responding with significant "knee-jerk reactions," he said.
The fact that other automakers like Ford and Toyota have recently taken similar steps could also be a contributing factor, Munyon said, as Nissan aims for "industry best practices."
Moving forward, he sees organizations adapting their equity and inclusion practices to better communicate their goals and purposes. An example he cited was the University of Tennessee changing its Division of Diversity and Engagement to the Division of Access and Engagement.
"My hope is that we don't throw out the baby with the bath water," Munyon said. "It is so critically important to create an environment where people are included, where they feel that they are fairly treated, and, frankly, where we have diversity to reflect our customers."
Where Nissan stands financially
Uchida said in the November meeting that facing the company’s current challenges is his “deepest regret,” saying he feels the weight of 130,000 global employees and their families on his shoulders.
In the first half of fiscal year 2024, Nissan’s operating profit fell a staggering 90% year-over-year to 32.9 billion yen or roughly $208 million, according to company leadership.
Before the end of the calendar year, the company revised its guidance for the rest of the fiscal year, lowering its estimated global retail sales 6.8% from 3.65 million to 3.4 million vehicles.
Uchida said Nissan’s core models in the U.S. simply aren’t generating the profit the company expected this year. He also noted that the company is missing out on the demand for hybrid vehicles. The hybrid market is projected to reach $19.6 billion in 2025, according to Statista, and Nissan hasn’t had a hybrid offering since discontinuing the hybrid Rogue ahead of 2020.
On the upside, newer models like the Nissan Kicks and Infiniti QX80 oversold projections in 2024, Uchida said.
Other company-identified issues are profitability, the gap between sales plans and actuality, an inability to meet customer needs in time, cost competitiveness and “brand power.”
“We will be making further changes to the leadership team in January and April of next year,” Uchida said.
He said the company is offering voluntary separation packages in the U.S. Nissan has not specified how many Tennessee employees are being impacted.
Hadley Hitson covers business news for The Tennessean. She can be reached at hhitson@gannett.com. To support her work, subscribe to The Tennessean.