Nissan to double global job cuts to over 10000

1260
Nissan to double global job cuts to over 10000

Nissan warns of profit plunge, set to unveil 10,000 job cuts

Nissan Motor Co Ltd (7201.T) warned on Wednesday that first-quarter profit tumbled around 90% percent, a day before it is expected to announce more than 10,000 job cuts as the crisis deepens at Japan’s second-largest automaker.

Japanese media reported that the job cuts were likely to hit factories in South America and other regions where Nissan has low profitability.

This is not Brexit related and like all motor manufacturing companies a global downturn as produced restructuring throughout.

Nissan has also struggled to improve poor profit margins in the US, the world’s second-biggest automotive market, where years of heavy discounting to try to drive sales has hurt its brand image and bottom line.

The dismal earnings, due to be formally announced on Thursday, mark one of Nissan’s worst quarterly performances in around a decade. The automaker is fighting to rein in its operations after years of aggressive expansion under former chairman Carlos Ghosn, ousted last year in a dramatic scandal that shook the industry.

The planned job cuts over the next few years include the 4,800 detailed in May and will mostly be at factories overseas with low utilization rates, a person with direct knowledge of the matter said on Wednesday.

Nissan declined to comment on the job cuts. It said a Nikkei business daily report that it suffered roughly a 90% year-on-year drop in first-quarter operating profit was “broadly accurate”. Its shares ended the day up nearly 1.0% earlier.

Nissan is struggling to improve weak profit margins in the United States, a key market where Ghosn for years pushed to aggressively grow market share during his time as chief executive.

Years of heavy discounting to grow sales in the world’s second-biggest auto market have left Nissan with falling demand for the Altima sedan and other models, a cheapened brand image, low resale values, and a nearly battered bottom line.

“Deteriorating performance in the United States is a big issue that we’re facing,” Motoo Nagai, chairman of the automaker’s newly formed audit committee, said on Wednesday.

“For a long time we were concerned with increasing volume (sold in the market). We were chasing numbers. Now it’s time to enhance the brand,” he said.

The job cuts to be disclosed this week would exceed 7% of Nissan’s 138,000-strong workforce and are part of a broad “turnaround” strategy to be rolled out later this year, said another source, a top executive who asked not to be named because he is not authorized to speak with the media.

The plan would be “aimed at unwinding Ghosn’s negative legacies”, which has led to excess, he added.

Regions with significantly under-utilised manufacturing capacity which could be affected by job cuts included India and Brazil, another source said.

The latest job cuts highlight the extent of problems facing Chief Executive Hiroto Saikawa, who is also grappling with fractured relations with French alliance partner Renault SA (RENA.PA) following the arrest of Ghosn, their shared former chairman.

Ghosn has been charged with financial misconduct in Japan and denies wrongdoing.

Saikawa kept his job in a vote at an annual shareholders meeting last month, fighting off a rare rebuke by top proxy advisory firms who urged shareholders not to reappoint him considering he was groomed for leadership by Ghosn.

Support Labour Heartlands

Help Us Sustain Ad-Free Journalism

Sorry, I Need To Put Out the Begging Bowl

Independent Journalism Needs You

Our unwavering dedication is to provide you with unbiased news, diverse perspectives, and insightful opinions. We're on a mission to ensure that those in positions of power are held accountable for their actions, but we can't do it alone. Labour Heartlands is primarily funded by me, Paul Knaggs, and by the generous contributions of readers like you. Your donations keep us going and help us uphold the principles of independent journalism. Join us in our quest for truth, transparency, and accountability – donate today and be a part of our mission!

Like everyone else, we're facing challenges, and we need your help to stay online and continue providing crucial journalism. Every contribution, no matter how small, goes a long way in helping us thrive. By becoming one of our donors, you become a vital part of our mission to uncover the truth and uphold the values of democracy.

While we maintain our independence from political affiliations, we stand united against corruption, injustice, and the erosion of free speech, truth and democracy. We believe in the power of accurate information in a democracy, and we consider facts non-negotiable.

Your support, no matter the amount, can make a significant impact. Together, we can make a difference and continue our journey toward a more informed and just society.

Thank you for supporting Labour Heartlands

Just click the donate button below