Nissan To Shut Down Three Plants, Slash 21,000 Jobs

TOKYO: Nissan Motor Co. Ltd., Japan's second largest automaker, announced on Oct. 18 it will close three plants and slash 21,000 jobs in a drastic move to combat its huge losses and return to profitability. "Nissan is in bad shape," says the company's new second in command, Carlos Ghosn, a senior Renault SA executive who is known as a cost cutter in France for his reputation at Renault, which acquired a 36.8% stake in heavily indebted Nissan and 22.5% in its truck unit Nissan Diesel. "We have to make sure we do not carry too much capacity compared with what we will produce in the foreseeable future," he told a news conference at which he revealed the Nissan Revival Plan. "We cannot afford to come up with a soft solution. We have to have a drastic solution." The 21,000 jobs that will be shed will hit 14% of Nissan's total workforce, and the workers will be laid off by March 2002. The staff cuts would include 4,000 jobs from manufacturers, 6,500 from dealerships, and 6,000 from sales and general administration. Factories to be closed by March 2001 are Tokyo's Murayama plant, where 3,100 people work, Kyoto's Nissan Shatai Kyoto plant with 1,200 staff, and Nagoya's Aichi Kikai Minato plant with 916 employees, Ghosn says. Nissan was making provisions for an extraordinary loss in the current fiscal year to March 2000 of 200 billion yen (US$1.9 billion), Ghosn says, but it is expected to return to profit the following year. Debt would be cut in half to 700 billion yen by March 2003, he pledges.