Related News

Home » Business » Auto

Forceful plan lifts Nissan's shares

NISSAN Motor Co shares jumped yesterday, a day after Japan's third-biggest auto maker announced an aggressive restructuring plan, including cutting 20,000 jobs worldwide, to cope with the global slump.

Nissan shares jumped 7.3 percent to 280 yen in Tokyo as investors welcomed the measures announced on Monday by Chief Executive Carlos Ghosn, who also forecast a 265-billion-yen (US$2.9 billion) net loss for the fiscal year through March. That would be Nissan's first annual loss since the year ending March 2000.

Tsuyoshi Mochimaru, auto analyst with Barclays Capital in Tokyo, said that the market was relieved the bad news was all out for now. But he warned prospects for a quick recovery were slim.

"If investors are assuming solid profit recovery for the fiscal year ending March 2010, they could be in for disappointment," he said.

Nissan carried out some restructuring in 1999, when Ghosn first arrived from alliance partner Renault SA and so Nissan doesn't have that much fat left to trim this time around, Mochimaru said.

"It's probably hard to expect a turnaround like the V-shaped recovery that happened back then," he said.

Yesterday, Standard & Poor's placed Nissan's credit rating on negative watch, indicating its "BBB+" rating may be lowered amid a bleak financial outlook. A BBB+ rating means a firm's ability to meet financial commitments could be weakened by worsening economic conditions.

"The rating on Nissan may be lowered by one notch if we determine that Nissan's financial profile will not be able to absorb the negative impact of cash burn," it said.

To fight the slump, Nissan said it will cut 20,000 jobs worldwide, or 8.5 percent of its 235,000-strong global work force, by March 2010.


Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.

沪公网安备 31010602000204号

Email this to your friend