{"id":5574,"date":"2019-07-26T00:11:06","date_gmt":"2019-07-26T05:11:06","guid":{"rendered":"http:\/\/planesintheair.com\/?p=5574"},"modified":"2019-07-26T00:11:11","modified_gmt":"2019-07-26T05:11:11","slug":"nissan-cuts-12500-jobs-as-crisis-results-in-profit-wipe-out","status":"publish","type":"post","link":"https:\/\/planesintheair.com\/?p=5574","title":{"rendered":"Nissan Cuts 12,500 Jobs as Crisis Results in Profit Wipe Out"},"content":{"rendered":"\n

YOKOHAMA (Reuters) – Nissan Motor Co unveiled its biggest restructuring plan in a decade, axing nearly a tenth of its workforce and flagging possible plant closures to rein in costs that ballooned when Carlos Ghosn was CEO.<\/p>\n\n\n\n

The cuts announced on Thursday followed a collapse in Nissan’s quarterly profit, highlighting how a crisis – brought about by sluggish sales and rising costs – is deepening at Japan’s No. 2 automaker in the wake of a financial misconduct scandal over Ghosn. Ghosn has denied the charges.<\/p>\n\n\n\n

The dismal quarter will pile pressure on Chief Executive Hiroto Saikawa, who has been tasked with shoring up the automaker’s performance at a time when the industry is struggling worldwide.<\/p>\n\n\n\n

China’s slowing economy, further depressed by a trade war with the United States, has hit demand, even as American consumer confidence has faltered.<\/p>\n\n\n\n

Tougher emission regulation has taken as toll on diesel-car sales in Europe, and an increase in electric vehicle sales and ride-sharing has worsened a drop in sales at the world’s biggest car makers.<\/p>\n\n\n\n

Ford Motor Co, the second-largest U.S. automaker, is also cutting 12,000 jobs and closing plants, while Daimler, Aston Martin and supplier Continental warned on profits this week.<\/p>\n\n\n\n

JOB CUTS<\/p>\n\n\n\n

Nissan will reduce at least 12,500 positions globally by March 2023 – its deepest job cuts since 2009 – and slash production capacity, mainly of compact cars at underutilized plants abroad. The move will shrink its product line-up by about 10%, Saikawa said,<\/p>\n\n\n\n

The maker of the Rogue SUV crossover and the tiny, low-cost Datsun Redi-Go, had 138,000 employees as of March 2018.<\/p>\n\n\n\n

“We are mainly targeting sites where we made investments to produce compact cars under the Power 88 plan,” Saikawa told reporters at a briefing at Nissan headquarters, referring to an aggressive growth strategy spearheaded by Ghosn in 2011 to grab 8% global market share and an 8% operating margin.<\/p>\n\n\n\n

Saikawa said a total of 14 facilities would be affected.<\/p>\n\n\n\n

Nissan’s job cuts expand on redundancies initially announced in May, which affected eight facilities including in Spain – where trucks and vans are made – and Indonesia, where the March subcompact hatchback and Datsun models are manufactured.<\/p>\n\n\n\n

Nissan also produces compact car models at facilities including in Mexico, Russia, France, and Thailand.<\/p>\n\n\n\n

Roughly half the announced job cuts so far have cost the company around 40 billion yen, and further layoffs could cost about the same, chief financial officer Hiroshi Karube said.<\/p>\n\n\n\n

‘VERY POOR’ PROFITABILITY<\/p>\n\n\n\n

Years of heavy discounting and fleet sales, particularly in the United States, has left Nissan with a cheapened brand image and low vehicle resale values, and also hit profits.<\/p>\n\n\n\n

Nissan’s first-quarter operating profit plunged 98.5% to 1.6 billion yen ($14.80 million), its worst performance since a loss in the March 2008 quarter.<\/p>\n\n\n\n

“Profitability is very poor at the moment,” Saikawa said, but added that the company was pushing to achieve its revenue target of 14.5 trillion yen and operating margin of 6% through the end of fiscal 2022.<\/p>\n\n\n\n

The automaker said global vehicle production will fall 10% through the year to March 2023 while global sales till then will increase modestly to 6.0 million units annually from the current 5.5 million.<\/p>\n\n\n\n

The company maintained its profit forecast of 230 billion yen for the year ending March 2020, a 28% drop from last year and its weakest in more than a decade.<\/p>\n\n\n\n

(Reporting by Naomi Tajitsu; Editing by Sayantani Ghosh, Muralikumar Anantharaman and Keith Weir)<\/p>\n\n\n\n

\"\"
Nissan Juke MY18 Exterior Black Perso RHD<\/figcaption><\/figure>\n","protected":false},"excerpt":{"rendered":"

Nissan Motor Co unveiled its biggest restructuring plan in a decade, axing nearly a tenth of its workforce and flagging possible plant closures to rein in costs that ballooned when Carlos Ghosn was CEO.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3794,5877,5670,2203,5676,1397,868],"tags":[],"class_list":["post-5574","post","type-post","status-publish","format-standard","hentry","category-auto-news","category-car-news","category-economy-news","category-finance-news","category-international-news","category-stock-news","category-transportation-news"],"_links":{"self":[{"href":"https:\/\/planesintheair.com\/index.php?rest_route=\/wp\/v2\/posts\/5574","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/planesintheair.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/planesintheair.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/planesintheair.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/planesintheair.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=5574"}],"version-history":[{"count":1,"href":"https:\/\/planesintheair.com\/index.php?rest_route=\/wp\/v2\/posts\/5574\/revisions"}],"predecessor-version":[{"id":5576,"href":"https:\/\/planesintheair.com\/index.php?rest_route=\/wp\/v2\/posts\/5574\/revisions\/5576"}],"wp:attachment":[{"href":"https:\/\/planesintheair.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=5574"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/planesintheair.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=5574"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/planesintheair.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=5574"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}