Nissan announces 9,000 layoffs across Tennessee, US amid effort to cover 'severe' losses

Nissan announces 9,000 layoffs across Tennessee, US amid effort to cover ‘severe’ losses

Posted by Admin November 7, 2024 Jobs

Nissan Motor will cut 9,000 jobs and 20% of its global manufacturing capacity, the automaker said on Thursday, as it scrambles to reduce costs by $2.6 billion in the current fiscal year amid a sales slump in China and the U.S.

Nissan, which has its U.S. corporate headquarters in Franklin, announced it will cut 400 billion yen from its balance sheet to stabilize losses. But company officials did not specify whether its largest manufacturing facility, the Nissan Smyrna Vehicle Assembly Plant, will be affected.

Nissan builds the Leaf, Maxima, Murano, Pathfinder, Rogue and QX60 in Smyrna and produces engine parts at the Decherd Powertrain Plant. The company said it will reduce global production by a fifth.

CEO Makoto Uchida forfeited 50% of his monthly salary beginning this month to demonstrate the firm’s commitment to improving its finances.

“Facing a severe situation, Nissan is taking urgent measures to turnaround its performance and create a leaner, more resilient business capable of swiftly adapting to changes in the market,” the company said in a Thursday statement.

The plans underline the vulnerability of Japan’s third-largest automaker, having never fully recovered from the disarray that led to the 2018 ouster of former chairman Carlos Ghosn and scaling back of the partnership with Renault SA.

Nissan cut its annual profit outlook by 70% to 150 billion yen ($975 million) on Thursday, the second time it lowered the forecast this year. Like many foreign automakers, it is struggling in China where BYD and other local manufacturers are gobbling up market share with affordable EVs and hybrids that boast advanced technology.

“To achieve healthy growth in the future, the company will implement a structure to secure sustainable profitability and cash generation, even with a projected annual sales of 3.5 million units by fiscal year 2026,” Nissan’s statement said.

But Nissan’s graver problem may be in the United States, where it lacks a credible line-up of hybrid cars. That’s in contrast to Japanese rival Toyota, which has seen a boom in demand for gasoline-petrol hybrid cars.

Nissan misread demand for hybrids in the United States, CEO Makoto Uchida told a press conference.

“We didn’t foresee HEVs ramping up this rapidly,” he said, referring to hybrid EVs.

“We did start to understand this trend towards the end of last fiscal year,” he said, adding that making some changes to core models didn’t go as smoothly as planned.

The Yokohama-based company is planning to cut 9,000 jobs, equivalent to 6.7% of its 133,580 global employees.

“These turnaround measures do not imply that the company is shrinking,” Uchida said. “Nissan will restructure its business to become leaner and more resilient, while also reorganizing management to respond quickly and flexibly to changes in the business environment.”

— The Tennessean contributed to this report.