Nissan to incur 1st loss under Ghosn, to cut 20,000 jobs in FY 2009+

TOKYO, Feb. 9 Kyodo -
Nissan Motor Co. said Monday it will implement 20,000 job cuts worldwide and
capital investment reductions in fiscal 2009 as sliding sales and a stronger
yen prompted the company to anticipate its first red-ink figure for the current
fiscal year since Carlos Ghosn joined its management a decade ago.
The third-largest Japanese automaker slashed its earnings forecasts for fiscal
2008, projecting a group net loss of 265 billion yen, compared with a profit of
160 billion yen Nissan anticipated in October and a net profit of 482.26
billion yen in fiscal 2007.
This represents its first red-ink since fiscal 1999 when Ghosn, the current
president, became chief operating officer after Nissan formed an alliance with
France's Renault SA to weather its financial difficulties.
With Nissan's announcement, all of the eight major Japanese auto makers now
expect sharp falls in their sales for fiscal 2008 from a year earlier and five
of them, including industry leader Toyota Motor Corp., predict annual net
losses amid the deepening global economic downturn.
''I think this recession is frankly equal to none I know in the past,
particularly for Japan,'' Ghosn said at a press conference in Tokyo, blaming
three elements -- the strengthening yen, the heavy recession particularly in
markets that are usually major exporting markets for Japanese industry, and the
credit crunch in the global financial market.
''The global automotive industry is in turmoil and Nissan is not an
exception,'' he said.
As part of measures to combat the anticipated loss, Nissan said it will cut its
worldwide workforce of about 235,000 by 8.5 percent to 215,000 in fiscal 2009
through March 2010.
Of the job cuts, 12,000 -- 4,000 permanent and 8,000 temporary jobs -- will be
in Japan, and the rest will be overseas, Nissan said, while declining to give a
further regional breakdown.
Nissan also announced reductions in the number of product launches in the
coming years, as well as a scale-down and halt in its joint production projects
with Renault in India and Morocco, respectively.
Nissan also aims to suspend its sports activities, including baseball and
athletic teams, as it plans to focus all its resources on core operations,
Ghosn said.
These restructuring measures were revealed at a time when Nissan is suffering
from weakening sales especially in its main markets of North America, Europe
and Japan.
Nissan's global vehicle sales for the April-December period fell 3 percent from
a year earlier to 2,633,000 units, with those in North America diving 10.3
percent, those in Japan down 9 percent and those in Europe off 7.7 percent.
In response to such weakening demand, Nissan said it will cut its planned
global output for fiscal 2008 by 787,000 units, or 20 percent, from its initial
target. The number of production days in Japan will be slashed by 50 percent
from an average of 20 days per month to 10 days in February and March.
In addition to sales declines, the yen's steep appreciation against the dollar
and other key currencies is also eroding its overseas earnings, the firm said.
For fiscal 2008 ending March, Nissan now expects to report a group operating
loss of 180 billion yen, compared with a profit of 270 billion yen forecast in
October, with its sales projection slashed 13.5 percent from its previous
estimate to 8.3 trillion yen.
The latest forecast compares with fiscal 2007's operating profit of 790.83
billion yen and sales of 10.82 trillion yen.
In addition to the layoffs and production cuts, Nissan also said it will reduce
capital spending in fiscal 2008 by about 21 percent from a year earlier and
trim costs by 14 percent in fiscal 2009 to below 330 billion yen.
The company will also eliminate bonus payments for board members for fiscal
2008 and impose a 10 percent salary cut on all board members and corporate
officers from next month.
Ghosn said Nissan is also considering introducing a work-sharing scheme to
share workloads at reduced pay.
Minimizing hiring is also among other measures to achieve its plan to cut labor
cost in high-cost countries like Japan, the United States and Europe by 20
percent from a year earlier to 700 billion yen in fiscal 2009, Nissan said.
Meanwhile, Nissan said it will review its product lineup, while putting greater
focuses on low-cost cars and smaller commercial vehicles. The automaker also
stuck to its earlier plan to introduce electric vehicles in 2010.
''We remain committed to our strategy of zero-emission vehicle leadership,''
Ghosn said. ''Developing technologies requires heavy investments of cash, and
we are currently talking to various governments about securing grants to fund
threes important environmental advances,'' he said.
For the April-December period, Nissan said its consolidated operating profit
fell 84.0 percent from a year earlier to 92.46 billion yen and its net profit
dropped 87.5 percent to 43.18 billion yen on sales of 6.69 trillion yen, down
14.7 percent.
For the whole of fiscal 2008, Nissan said it will not pay any year-end
dividend, compared with 20 yen per share paid a year earlier. Its total
dividend payout for fiscal 2008 is now planed to be 11 yen, down from 40 yen a
year earlier.
==Kyodo
2009-02-09 21:00:52