Europe could be focus of possible Nissan job cuts

Europe could be focus of possible Nissan job cuts

TOKYO —  Nissan is considering cutting 20,000 jobs from its global workforce, focusing on Europe and developing countries, Japanese news media reported, as the automaker struggles to recover from plunging car sales and the effects of the coronavirus crisis.

The outbreak is forcing Nissan to cut back on production, and restructuring measures in Japan are also being considered, Kyodo news agency reported. The job reductions are part of a midterm reorganization plan that Nissan is due to unveil on May 28, Kyodo said.

The reduction is much larger than the 12,500 staff cuts Nissan announced in the middle of 2019.

Nissan has been in turmoil since the November 2018 arrest of former Chairman Carlos Ghosn, with an aging car lineup and management paralysis denting its outlook. The automaker warned last month it expects to post a loss for the latest fiscal year through March, as the pandemic shuttered dealerships in major markets and the economic fallout hurt consumer demand for new cars.

A representative for Nissan declined to comment on the report.

Nissan plans to cut about 300 billion yen ($2.8 billion) in annual fixed costs and book restructuring charges as the pandemic further depresses sales, a person with knowledge of the measures said last week.

The company will phase out the Datsun brand, shut down one production line in addition to the recently closed operation in Indonesia and reach the reduced spending target this year by cutting marketing, research and other costs, the person said.

Nissan is working on a plan to scale back its European business, focusing on SUVs and commercial vehicles as well as more effective sharing of products and investments with alliance partner Renault, sources told Reuters.

Other potential actions in Europe include closing Nissan’s factory in Barcelona, which makes pickups for Nissan and Renault, and a reduction in shifts at the automaker’s plant in Sunderland, England, which makes SUVs for the European market. 

Nissan’s revival plan will be one of three presented next week by the Renault-Nissan-Mitsubishi alliance, which has struggled following the arrest of former Chairman Carlos Ghosn in Japan in November 2018 on charges of financial wrongdoings. The alliance as a whole is scheduled to offer an umbrella plan on May 27, followed by Nissan’s plan on May 28 and Renault’s on May 29.

Mitsubishi Motors, in which Nissan has a controlling stake, delivered more bad news for the alliance last week, as it sank into the red in the latest quarter as sales and production plunged.

Mitsubishi swung to a net loss of 14 billion yen ($129.9 million) in the fiscal fourth quarter ended March 3.

Renault posted an annual loss of 141 million euros in 2019, compared with a profit of 3.3 billion euros in 2018. It is said to be considering closing component and assembly plants in France as part of its 2 billion euro ($2.2 billion) cost-cutting plan.

Reuters and Bloomberg contributed to this report

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