The automaker Nissan Motor said yesterday it would eliminate 20,000 jobs, or 9 percent of its workforce.
The announcement comes as the Japanese automaker cuts its earnings estimates predicting a loss this year.
Nissan filed the following revised forecast for the fiscal year ending March 31, 2009, with the Tokyo Stock Exchange:
• Consolidated net revenues of 8.3 trillion yen;
• Operating loss of 180 billion yen;
• Ordinary loss of 190 billion yen; and
• Net loss of 265 billion yen.
Global crisis measures
Apart from the job cuts around the globe totalling 20,000 employees, Nissan also plans to counter the crisis with the following actions:
- In order to focus on recovery actions, our 2008-2012 midterm business plan, Nissan GT 2012, will be suspended, but commitments on quality and zero-emission vehicles will be retained.
- Labor costs will be reduced in line with the decrease in revenues. During FY2009 labor costs in high-cost countries will be reduced by 20%, from 875 billion yen to 700 billion yen.
- Bonus payments to the board of directors will be eliminated for FY2008. Starting in March and until the situation clearly improves, salaries paid to board members and corporate officers will be reduced by 10% and those paid to managers in NML and affiliate companies in Japan by 5%.
- Nissan will negotiate the implementation of a work sharing scheme for staff workers, to be announced by the end of the fiscal year. Global headcount will be reduced by 20,000 through FY2009, reducing Nissan’s headcount from 235,000 to 215,000.
- Inventory will be tightly controlled. In March 2008, company and dealer inventory was 630,000 units; that level will be reduced by 20%, to 480,000, by March 2009.
- Production will be right-sized through changes such as shift elimination, non-production days and shorter working hours. These actions will reduce global production by 787,000 units – a 20% decrease compared to planned volume – by the end of this fiscal year.
- Capital expenditure reductions will result in a 21% contribution to saving cash by the end of FY2008 compared to FY2007. An additional reduction of 14% will be made in FY2009, taking overall capital expenditures from 384 billion yen in FY2008 to less than 330 billion yen in FY2009.
- Joint manufacturing projects with Alliance partner Renault in Morocco and India will be revised. In Chennai, India, the joint plant will proceed with a reduced ramp-up speed. In Morocco, Nissan will suspend its participation in the industrial project near Tangiers.
- The product portfolio will be revised, including the cancellation of selected future programs. Nissan will launch an average of 10 all-new vehicles per year in the 2009-2012 period, including the company’s all-new, A-Platform entry-car lineup and a dedicated all-electric vehicle.
- By improving working capital, mainly accounts payable and receivable, Nissan will generate 130 billion yen of cash in FY2009.
- A detailed review is ongoing to identify deeper synergy opportunities within the Renault-Nissan Alliance. The focus is on future investments in products, technology, support functions and purchasing cost reductions. Each company will contribute to free cash flow with a minimum of 90 billion yen (750 million euros) in synergy benefits during FY2009.
Nissan is Japan’s third largest automaker. The firm is 44 per cent owned by the French Renault automaker.
Image by mujitra under Creative Commons
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