Ailing Nissan to slash jobs, costs
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Nissan is slashing 12,500 jobs, or about 9 percent of its global workforce, to cut costs and achieve a turnaround amid tumbling profits, the Japanese automaker said yesterday.
Nissan Motor Co also said it will cut global production capacity by 10 percent and reduce model lineups by at least 10 percent by the end of fiscal 2022.
Nissan Chief Executive Hiroto Saikawa said most of the jobs cut will be auto-plant workers. He did not give a regional breakdown but said the job cuts were needed to reduce global production capacity and cut costs.
A company presentation said more than 6,400 jobs would be eliminated in eight unspecified locations by fiscal 2019. Another 6,100 will come by fiscal 2022, it said.
Saikawa told reporters at the automaker’s Yokohama headquarters that sales are expected to begin to recover but it will take time. Some of the efforts have already begun, he said.
The Japanese automaker is struggling to fix its brand image and get growth going again following the arrest of former Chairman Carlos Ghosn.
Ghosn says he is innocent. He is awaiting trial in Japan on various financial misconduct charges.
“Our situation right now is extremely severe,” Saikawa said, noting attractive models were coming with technology like artificial intelligence and zero emissions to boost sales.
“Our stance to lead the industry is unchanging.”
From April to June, Nissan’s profit nosedived to 6.4 billion yen (US$59 million) from 115.8 billion yen the same quarter in the previous year.
Quarterly sales shrank 13 percent to 2.37 trillion yen.
For the fiscal year ended in March, annual profit dropped to less than half of that of the previous year, at 319.1 billion yen, the worst showing since the global financial crisis a decade ago.
Although Ghosn’s absence from Nissan and its alliance with Renault SA of France, which owns 43 percent of Nissan have been a concern, the latest results were so dismal that questions about Ghosn weren’t raised.
Christian Stadler, a professor of strategic management of Warwick Business School, said the scandal over Ghosn was a distraction that has undermined Nissan’s business, on top of challenges faced by the auto industry as a whole.
“The economic slowdown, which hit key markets, the uncertainty surrounding Brexit and the race to embrace new technology as the crackdown on diesel and petrol continues, all contributed to Nissan’s fall in sales and will continue to do so,” he said.
Nissan’s global sales from April to June fell 6 percent to 1.23 million vehicles.
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