Nissan slashing 20,000 jobs, sees annual loss

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

Tokyo-based Nissan has already reduced its temporary plant workers in Japan by about 2,000, slashed its British work force by 1,200 at its plant in Sunderland, northern England, where it had employed about 5,000 people. It has offered early retirement to 1,200 workers in the US, but that number will likely increase, according to Nissan. It also has work stoppages in Spain.

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]

Japanese rival Toyota Motor Corp., which is projecting a 350 billion yen ($3.85 billion) net loss for the fiscal year through March, its first such loss since 1950, is reducing contract workers in Japan from 8,800 in June last year to 3,000 in March.

Honda Motor Co., Japan's No. 2 automaker, is faring relatively better and is expecting to stay in the black, with a 80 billion yen ($879 million) profit. But it will cut the number of temporary workers at its Japan plants from 3,100 to zero by the end of April.

Nissan's directors on the board will forgo bonus pay for the year ending March. Their salaries, as well as the salaries of corporate officers, will be reduced by 10 percent, while managers' salaries will be reduced by 5 percent.

Nissan will also negotiate a "work-sharing" scheme with the unions, Ghosn said.

In work-sharing, an employee's work load gets doled out to two or more employees, but they also must take a pay cut. The effort allows troubled companies to avoid layoffs while adjusting to plunging production. The benefits are that skilled staff aren't lost and the arrangement can be quickly dropped, allowing production to be ramped up without delay, once the industry recovers.

"You'd be ready to restart immediately when the crisis is over," said Ghosn.

He said he was interested in changing to a four-day week from a five-day week, while reducing compensation per worker, and that was better than cutting jobs.

Among other measures, production will be reduced and inventory will be controlled, according to Nissan.

Shift elimination, work stoppages and shorter hours will help reduce global production by 20 percent, or 787,000 vehicles, from the initial plan, by the end of this fiscal year, it said.

Inventory is being reduced by 20 percent to 480,000 vehicles from 630,000 in March 2008, Nissan said.

Nissan sold 731,000 vehicles worldwide in the quarter ended Dec. 31, down 18.6 percent from a year earlier. Nissan's vehicle sales suffered especially in the US, where they dropped 29.7 percent in January.

Nissan remains committed to developing electric vehicles and other zero-emission technology, Ghosn said.

"We don't think this crisis is going to last forever," he said.

Nissan shares slid 5.8 percent to 261 yen. Earnings were announced after trading ended in Tokyo.

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