Nissan cuts 9,000 jobs amid production scale-back and losses
Nissan, the third-largest car manufacturer in Japan, announced on Thursday a reduction in employment and a decrease in global production capacity. The CEO admitted that the company, which employs about 133,500 people worldwide, made an error in judgment and has decided to forgo part of his salary.
The Japanese corporation is facing challenges for several reasons, one being a miscalculation in the growing demand for hybrids in the United States. Unlike Toyota, which has benefitted from this trend, Nissan based in Yokohama is not performing as well. Additionally, the dominance of the Chinese BYD in the Chinese market further complicates Nissan's financial situation.
On Thursday, November 7, Makoto Uchida, CEO of the Japanese corporation, acknowledged the misjudgment regarding the forecasted growth in popularity of electric-gasoline vehicles.
— We did start to understand this trend towards the end of last fiscal year — said the head of Nissan Motor, as quoted by Reuters. This will have difficult consequences for some employees.
Nissan's CEO resigns part of his salary
Uchida announced the dismissal of 9,000 people, which is 6.7 per cent of the 133,500 employees worldwide. He will also "voluntarily" face consequences by receiving only half of his salary starting this month. Other members of the executive committee, as reported by Reuters, have also decided to reduce their salaries.
This is not the end. Nissan announced that it will reduce global production capacity by 20 per cent. In return, the corporation intends to move forward, shortening the development time for new projects to 30 months.
The company is restructuring to lower costs by CAD 3.5 billion. Nissan also aims to sell up to 10 per cent of its shares in Mitsubishi Motors to gain CAD 598 million.
Global sales of Nissan fell by 3.8 per cent to 1.59 million vehicles in the first half of the fiscal year, mainly due to a 14.3 per cent decline in China. Sales in the USA dropped by nearly 3 per cent to about 449,000 vehicles. Together, both markets account for nearly half of Nissan's global sales — reports Reuters.
