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Nissan slashing 20,000 jobs, sees annual loss

(Agencies)
Updated: 2009-02-09 22:19

TOKYO -- Nissan is slashing 20,000 jobs, or 8.5 percent of its global work force, to cope with what Japan's third-largest automaker expects will be its first annual loss in nine years.

Nissan Motor Co. Chief Executive Carlos Ghosn speaks during a press conference in Tokyo, Japan, Monday, Feb. 9, 2009. Nissan sank into a loss for the fiscal third quarter and forecast its first full-year loss in nearly a decade on Monday, forcing Japan's third-biggest automaker to slash 20,000 jobs, or 8.5 percent of its global work force. [Agencies]

"The global auto industry is in turmoil, and Nissan is no exception," Chief Executive Carlos Ghosn told reporters Monday in Tokyo.

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Nissan Motor Co. now expects a 265 billion yen ($2.9 billion) net loss for the fiscal year through March, joining a raft of other Japanese corporate giants, including Toyota, Toshiba and Sony, in slashing jobs and projecting annual losses.

The last time Nissan racked up an annual net loss was for the fiscal year ended March 2000, at the start of its alliance with Renault SA of France, which sent in Ghosn to rescue Nissan from the brink of collapse. Then, a bloated Nissan had lost money in seven of the previous eight years.

Ghosn, now also chief executive at Renault, said the troubles back then had been limited to Nissan but no automaker has been spared from the global economic slump.

"In 1999, we were alone. In 2009, everybody is suffering," he said.

The maker of the Z sports car and the March compact sank to a loss of 83.2 billion yen for the October-December period from a 132.2 billion yen profit a year earlier. That was its first quarterly net loss since it began reporting quarterly earnings in 2003.

Like other Japanese automakers, Nissan has been battered by the global slump, which has undermined sales in its vital North American market. A strong yen also ate into profits by eroding overseas earnings when converted back to yen.

As a key step in weathering the downturn, Ghosn said Nissan's global work force will be reduced by 20,000 through March 2010, to 215,000. Of the job cuts, 12,000 will be in Japan, including group companies, and the rest will be overseas, it said. The company did not give a further regional breakdown.

Mamoru Katou, analyst with Tokai Tokyo Research, remained pessimistic about Nissan's recovery prospects.

Nissan's job cuts in Japan, more aggressive than its domestic rivals, show its strategy to take production overseas and take advantage of the soaring yen but that would make the Nissan brand less popular in its home market, Katou said.

"The job cuts will hurt Japanese parts-makers, too, and in the long run diminish the Nissan brand value in Japan," he said.

Toyota and Honda, which both have gas-electric hybrids going on sale this year, are also better positioned to boost sales when the recovery kicks in, he said. Nissan does not have a comparable hybrid model.

Ghosn said hiring will become minimal, contracts for temporary workers will be ended and the company is offering early retirement packages.

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