http://www.thedetroitbureau.com/2019/07/nissan-expected-to-cut-10000-jobs-worldwide/
Worldwide
Automaker previously warned of “a difficult business environment.”
by Paul A. Eisenstein | Jul 24, 2019
Nissan Motor Corp. CEO Hiroto Saikawa delivered somber 2018 earnings news to the media and investors. The company’s 2019 earnings are expected to be worse.
Nissan is expected to announce plans to trim 10,000 jobs, as part of a global retrenchment aimed at addressing what the automaker has previously described as “a difficult business environment.”
Nissan sales and earnings have been in a tailspin in recent quarters, a situation that has grown worse since the arrest of former Chairman Carlos Ghosn on corruption charges last November. The company has forecast a 28% drop in earnings during the current fiscal year ending March 31, 2020.
The reports indicate the cuts could come as early as today or, perhaps at the company’s earnings news conference on Thursday, but a spokesman said, “We have not decided yet what we will announce” at that meeting. He declined to address the media reports.
(Young Buyers May be Ready to Shift Back to Sedans, Claims Nissan)
The automaker has seen sales slide in many key markets. In the U.S., for example, demand for Nissan and Infiniti-brand vehicles fell 14.9% last month and are off 8.2% for the first half of the 2019 calendar year. For the fiscal year that ended in March, Nissan’s worldwide sales were off 4.4% at 5.52 million vehicles.
In May, Nissan announced net income of $2.9 billion for the final quarter of the previous fiscal year, a 57% drop and the lowest figure in a decade.
Nissan’s planning to cut 10,000 jobs due to falling sales and earnings, but it’s unclear if the company’s plant in Smyrna, Tennessee, will be impacted.
The forecast for the just ended quarter, the first in the fiscal year, is $1.6 billion, which would mark another sharp decline.
While Nissan is not discussing the Japanese media reports, it announced in May plans to trim 4,800 jobs out of a worldwide workforce of 139,000. It is unclear if those cuts would be included in, or on top of, any new announcement.
(Nissan Recruits New Design Chief from Lincoln)
The reports indicate the carmaker will focus on regions where sales have been stumbling, such as South America. It is not clear whether North America also would be impacted. Nissan operates one of the biggest assembly complexes in the U.S. in Smyrna, Tennessee. It also runs two big production centers in Mexico.
Some cuts to production levels are anticipated in Japan, though it is unclear if job reductions would also be in the works. The Nikkan Kogyo newspaper also reported Nissan will prepare to end production of its NV200 van at a plant in Barcelona.
If the reports prove accurate, the cuts would mark a dramatic reversal from the global expansion plans put in place by Ghosn. The executive served for years as CEO, and then chairman, at Nissan, while also leading its French ally Renault and running the global Renault-Nissan-Mitsubishi Alliance.
Ghosn is currently out on bail and awaiting trial in Japan on a number of charge
The Japanese automaker is suffering from slow sales in its largest market, the U.S.
s including allegations he hid income and diverted company funds.
(Nissan Earnings Plunge on Lower Sales, Rising Warranty Costs)
The case has generated significant controversy, some contending he was targeted by Nissan in a bid to head off a planned takeover by Renault. The relations between the two companies have remained strained since the arrest.
https://www.thedetroitbureau.com/2019/07/nissan-job-cuts-go-deeper-than-expected/
Expected
Automaker eliminating 12,500 jobs, cutting production 10%, also eliminating 10% of its line-up.
by Paul A. Eisenstein | Jul 25, 2019
Nissan Motor Corp. CEO Hiroto Saikawa is coming under increasing pressure as Nissan’s fortunes fade,
Nissan will slash 12,500 jobs worldwide, significantly more than earlier reports from Japan had indicated.
The company also plans to reduce its production capacity by 10% over the next three years, while eliminating 10% of its current model mix.
“Our situation right now is extremely severe,” said CEO Hiroto Saikawa, during a news conference in Tokyo on Thursday morning. Saikawa tried to put an upbeat spin on the announcement by declaring that, “Our stance to lead the industry is unchanging.”
But the move is the most significant retrenchment by Japan’s second-largest automaker, and comes at a time when it is facing extensive internal turmoil, as well as questions about the long-term viability of its two decade-old alliance with French automaker Renault.
Thursday’s news conference brought a heavy dose of bad news for Nissan. The automaker had already suffered a sharp downturn during the fiscal year that ended March 31, global demand dipping 4.3%, to 5.22 million vehicles, while earnings were off 57%, to 319.1 billion yen, or $2.9 billion.
But the new fiscal year – which continues through March 31, 2020, has gotten off to an even worse start. Analysts had expected Nissan to deliver earnings of about $1.6 billion for the April-June quarter. Instead, Hiroto said, the results came in at a meager $59 million, or 6.4 billion yen, down from 115.8 billion yen during the first fiscal quarter of 2018.
(For more on Nissan’s weak 2018 fiscal year performance, Click Here.)
José Muñoz, Nissan’s former chief performance officer, is one of the many senior executives who have left the company in recent months.
The downturn reflects a variety of factors, said Christian Stadler, professor of strategic management at Warwick Business School, “The economic slowdown, which hit key markets such as the U.S. and China, the uncertainty surrounding Brexit, and the race to embrace new technology as the crackdown on diesel continues all contributed to Nissan’s fall in sales and will continue to do so.”
Demand was down in virtually all key markets, but Europe and North America have been particularly hard hit. Last month alone, sales of Nissan and Infiniti branded vehicles dipped 14.9%, a significantly sharper downturn than the overall U.S. market decline of around 2% for the year-to-date. For the full calendar year, demand has been off 14.9%, including both the Nissan and Infiniti brands.
Like other automakers, the second-largest of Japan’s automotive manufacturers has had to adapt to the shift from sedans, coupes, wagons and hatchbacks to light trucks. That puts passenger car models like the Versa and Sentra at risk as the company rationalizes its global line-up. But questions also center around the future of the Titan. Nissan’s big truck has largely failed to take advantage of booming demand for pickups in the U.S. market.
The weak performance is putting a spotlight on Saikawa, the one-time protégé of former CEO Carlos Ghosn. The chief executive was already under fire for his role in the arrest of Ghosn, the man who helped save Nissan from bankruptcy two decades ago, on corruption charges. A number of analysts, as well as some senior executives within Nissan, feel Saikawa helped orchestrate Ghosn’s take-down in order to prevent a possible takeover by alliance partner Renault.
(Nissan shoots down proposed Renault merger. Click Here for more.)
Nissan will eliminate 10% of its model line-up and small cars, such as Versa, could be particularly hard hit in the current, SUV-oriented market.
Since Ghosn was marched off his corporate jet and taken to the Tokyo Detention Center last November, an assortment of senior executives, including Chief Performance Officer Carlos Munoz, have either been fired or forced out.
Meanwhile, the future of the alliance – which also includes smaller Japanese carmaker Mitsubishi – has been under a cloud. The crisis also helped derail a planned Renault merger with Fiat Chrysler.
While many observers question whether Ghosn actually committed the numerous crimes he now has been accused of, his longer-term legacy is coming under question. He aggressively pushed Nissan to expand its model line-up, as well as its manufacturing base, in a bid to drive up sales, market share and margins. The Renault-Nissan-Mitsubishi Alliance has been one of the world’s largest automotive groups over the last several years, as a result.
But it now appears to be payback time. “This is really a crisis,” SBI Securities analyst Koji Endo told the Bloomberg news service. “Management is chaotic, there is a lot of restructuring pressure, and the most important thing here is to downsize. The company actually inflated too much under Carlos Ghosn.”
Nissan has yet to announce where the planned job and production cuts will take place. With North American demand down sharply, however, three massive production complexes, one in Smyrna, Tennessee, the others in Mexico, could be at risk, according to observers.
Worldwide
Automaker previously warned of “a difficult business environment.”
by Paul A. Eisenstein | Jul 24, 2019
Nissan Motor Corp. CEO Hiroto Saikawa delivered somber 2018 earnings news to the media and investors. The company’s 2019 earnings are expected to be worse.
Nissan is expected to announce plans to trim 10,000 jobs, as part of a global retrenchment aimed at addressing what the automaker has previously described as “a difficult business environment.”
Nissan sales and earnings have been in a tailspin in recent quarters, a situation that has grown worse since the arrest of former Chairman Carlos Ghosn on corruption charges last November. The company has forecast a 28% drop in earnings during the current fiscal year ending March 31, 2020.
The reports indicate the cuts could come as early as today or, perhaps at the company’s earnings news conference on Thursday, but a spokesman said, “We have not decided yet what we will announce” at that meeting. He declined to address the media reports.
(Young Buyers May be Ready to Shift Back to Sedans, Claims Nissan)
The automaker has seen sales slide in many key markets. In the U.S., for example, demand for Nissan and Infiniti-brand vehicles fell 14.9% last month and are off 8.2% for the first half of the 2019 calendar year. For the fiscal year that ended in March, Nissan’s worldwide sales were off 4.4% at 5.52 million vehicles.
In May, Nissan announced net income of $2.9 billion for the final quarter of the previous fiscal year, a 57% drop and the lowest figure in a decade.
Nissan’s planning to cut 10,000 jobs due to falling sales and earnings, but it’s unclear if the company’s plant in Smyrna, Tennessee, will be impacted.
The forecast for the just ended quarter, the first in the fiscal year, is $1.6 billion, which would mark another sharp decline.
While Nissan is not discussing the Japanese media reports, it announced in May plans to trim 4,800 jobs out of a worldwide workforce of 139,000. It is unclear if those cuts would be included in, or on top of, any new announcement.
(Nissan Recruits New Design Chief from Lincoln)
The reports indicate the carmaker will focus on regions where sales have been stumbling, such as South America. It is not clear whether North America also would be impacted. Nissan operates one of the biggest assembly complexes in the U.S. in Smyrna, Tennessee. It also runs two big production centers in Mexico.
Some cuts to production levels are anticipated in Japan, though it is unclear if job reductions would also be in the works. The Nikkan Kogyo newspaper also reported Nissan will prepare to end production of its NV200 van at a plant in Barcelona.
If the reports prove accurate, the cuts would mark a dramatic reversal from the global expansion plans put in place by Ghosn. The executive served for years as CEO, and then chairman, at Nissan, while also leading its French ally Renault and running the global Renault-Nissan-Mitsubishi Alliance.
Ghosn is currently out on bail and awaiting trial in Japan on a number of charge
The Japanese automaker is suffering from slow sales in its largest market, the U.S.
s including allegations he hid income and diverted company funds.
(Nissan Earnings Plunge on Lower Sales, Rising Warranty Costs)
The case has generated significant controversy, some contending he was targeted by Nissan in a bid to head off a planned takeover by Renault. The relations between the two companies have remained strained since the arrest.
https://www.thedetroitbureau.com/2019/07/nissan-job-cuts-go-deeper-than-expected/
Expected
Automaker eliminating 12,500 jobs, cutting production 10%, also eliminating 10% of its line-up.
by Paul A. Eisenstein | Jul 25, 2019
Nissan Motor Corp. CEO Hiroto Saikawa is coming under increasing pressure as Nissan’s fortunes fade,
Nissan will slash 12,500 jobs worldwide, significantly more than earlier reports from Japan had indicated.
The company also plans to reduce its production capacity by 10% over the next three years, while eliminating 10% of its current model mix.
“Our situation right now is extremely severe,” said CEO Hiroto Saikawa, during a news conference in Tokyo on Thursday morning. Saikawa tried to put an upbeat spin on the announcement by declaring that, “Our stance to lead the industry is unchanging.”
But the move is the most significant retrenchment by Japan’s second-largest automaker, and comes at a time when it is facing extensive internal turmoil, as well as questions about the long-term viability of its two decade-old alliance with French automaker Renault.
Thursday’s news conference brought a heavy dose of bad news for Nissan. The automaker had already suffered a sharp downturn during the fiscal year that ended March 31, global demand dipping 4.3%, to 5.22 million vehicles, while earnings were off 57%, to 319.1 billion yen, or $2.9 billion.
But the new fiscal year – which continues through March 31, 2020, has gotten off to an even worse start. Analysts had expected Nissan to deliver earnings of about $1.6 billion for the April-June quarter. Instead, Hiroto said, the results came in at a meager $59 million, or 6.4 billion yen, down from 115.8 billion yen during the first fiscal quarter of 2018.
(For more on Nissan’s weak 2018 fiscal year performance, Click Here.)
José Muñoz, Nissan’s former chief performance officer, is one of the many senior executives who have left the company in recent months.
The downturn reflects a variety of factors, said Christian Stadler, professor of strategic management at Warwick Business School, “The economic slowdown, which hit key markets such as the U.S. and China, the uncertainty surrounding Brexit, and the race to embrace new technology as the crackdown on diesel continues all contributed to Nissan’s fall in sales and will continue to do so.”
Demand was down in virtually all key markets, but Europe and North America have been particularly hard hit. Last month alone, sales of Nissan and Infiniti branded vehicles dipped 14.9%, a significantly sharper downturn than the overall U.S. market decline of around 2% for the year-to-date. For the full calendar year, demand has been off 14.9%, including both the Nissan and Infiniti brands.
Like other automakers, the second-largest of Japan’s automotive manufacturers has had to adapt to the shift from sedans, coupes, wagons and hatchbacks to light trucks. That puts passenger car models like the Versa and Sentra at risk as the company rationalizes its global line-up. But questions also center around the future of the Titan. Nissan’s big truck has largely failed to take advantage of booming demand for pickups in the U.S. market.
The weak performance is putting a spotlight on Saikawa, the one-time protégé of former CEO Carlos Ghosn. The chief executive was already under fire for his role in the arrest of Ghosn, the man who helped save Nissan from bankruptcy two decades ago, on corruption charges. A number of analysts, as well as some senior executives within Nissan, feel Saikawa helped orchestrate Ghosn’s take-down in order to prevent a possible takeover by alliance partner Renault.
(Nissan shoots down proposed Renault merger. Click Here for more.)
Nissan will eliminate 10% of its model line-up and small cars, such as Versa, could be particularly hard hit in the current, SUV-oriented market.
Since Ghosn was marched off his corporate jet and taken to the Tokyo Detention Center last November, an assortment of senior executives, including Chief Performance Officer Carlos Munoz, have either been fired or forced out.
Meanwhile, the future of the alliance – which also includes smaller Japanese carmaker Mitsubishi – has been under a cloud. The crisis also helped derail a planned Renault merger with Fiat Chrysler.
While many observers question whether Ghosn actually committed the numerous crimes he now has been accused of, his longer-term legacy is coming under question. He aggressively pushed Nissan to expand its model line-up, as well as its manufacturing base, in a bid to drive up sales, market share and margins. The Renault-Nissan-Mitsubishi Alliance has been one of the world’s largest automotive groups over the last several years, as a result.
But it now appears to be payback time. “This is really a crisis,” SBI Securities analyst Koji Endo told the Bloomberg news service. “Management is chaotic, there is a lot of restructuring pressure, and the most important thing here is to downsize. The company actually inflated too much under Carlos Ghosn.”
Nissan has yet to announce where the planned job and production cuts will take place. With North American demand down sharply, however, three massive production complexes, one in Smyrna, Tennessee, the others in Mexico, could be at risk, according to observers.
