Nissan eyeing 1st massive restructuring since Ghosn era
Nissan Motor Co. is set to implement its first large-scale restructuring measures since when the major Japanese automaker was led by former Chairman Carlos Ghosn, known as a cost-cutting guru.
Nissan is apparently considering shutting down two plants in the company's birthplace, Kanagawa Prefecture, south of Tokyo, while planning to launch a voluntary retirement program in Japan.
Preparations for closing the domestic facilities--the Oppama factory in the city of Yokosuka and the Shonan plant of affiliated Nissan Shatai Co. in the city of Hiratsuka--are expected to run into difficulties, however, as residents have expressed worries about the move's impact on the local economies and employment.
Nissan plans to close seven of its 17 vehicle assembly plants around the world by fiscal 2027.
On top of the two facilities in Japan, the firm's plants in India, Mexico and Argentina are expected to be subject to closures, informed sources said.
The company also plans to shed 20,000 jobs, or 15 % of its total global workforce, and has decided to solicit early retirements from domestic administrative staff starting in July.
Nissan last underwent massive restructuring measures in 1999, under Ghosn's leadership, as the automaker was facing a financial crisis at the time.
If it shuts down a domestic plant this time, that would be the first such move by Nissan since the company closed its Murayama plant in Tokyo's Musashimurayama in 2001.
It last solicited early retirements in 2007. Ghosn, who was from Renault SA, pulled off Nissan's V-shaped recovery by strengthening its partnership with the French automaker and promoting overseas operations in addition to carrying out restructuring measures.
Nissan is now struggling again, due to sluggish sales of its vehicles in the United States and China, reflecting factors such as delays in new model releases.
At a press conference on May 13, Nissan President and CEO Ivan Espinosa said he aims to improve the company's profitability by boosting sales of hybrid vehicles in the North American market and developing a new energy vehicle in China.
(Nissan) must prioritise self-improvement with greater urgency and speed, aiming for profitability with less reliance on volume," he said. An industry source said, however, that while Ghosn's leadership offered prospects for future growth, Nissan currently lacks a clear path forward.
The success of the planned large-scale restructuring efforts remains uncertain.
[Copyright The Jiji Press, Ltd.]
Photo by Reuters
