Nissan to Cut 3,500 Jobs

Profits decline 40.5% on sharp slowdown in U.S. market

Nissan Motor Co. said on Oct. 31 it was axing 3,500 jobs worldwide and cut its full-year forecasts by two-thirds as the global economic crisis shakes the auto industry. Japan's third largest automaker, which is controlled by Renault, said that profits for the first half slumped by 40.5% to 126.34 billion yen (US$1.3 billion) on a sharp slowdown in the key U.S. market and the soaring value of the yen.

"The global financial and economic crisis has had a profound effect on every area of our industry, with the grip on credit and declining consumer confidence being the most damaging factors," said Nissan-Renault boss Carlos Ghosn. "Since we see no relief in the second half, we are taking all necessary and responsible measures to protect the company and preserve our ability to rebound when conditions improve," he said.

Nissan will eliminate a total of 3,500 jobs in Spain, Japan and the U.S. by the end of December, said chief operating officer Toshiyuki Shiga. Some 2,500 permanent positions will be cut in Spain and the United States, while a further 1,000 temporary jobs will be axed in Japan.

Nissan has already announced some of the cuts locally, with thousands of protesters taking to the streets last week in Barcelona to denounce the job cuts.

Ghosn, who salvaged Nissan from near bankruptcy when he was parachuted in from Renault a decade ago, has said that his priority will be ensuring his companies' financial health holds up during the global crisis.

But Nissan said that its overall vehicle sales rose 4.7% in the first half compared with a year earlier thanks to continued solid demand in China and Middle East.

In the U.S., sales fell 3.4% but Nissan said it did well considering the overall U.S. market was down 15.%, allowing the Japanese automaker to increase its share.

For the six months through September, Nissan's operating profit tumbled 47.8% to 191.6 billion yen. Sales fell 3.9% to 4.87 trillion yen.

Copyright Agence France-Presse, 2008

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