Nissan is planning aggressive cost cuts to deal with an unexpected slump in sales as the expansionist strategy it inherited from fugitive former company chairman Carlos Ghosn flounders sources familiar familiar with the story reveal.
Japan’s second biggest carmaker is set to eliminate at least 4,300 white-collar jobs and shut two manufacturing sites as part of broader plans to add at least 480 billion yen to its bottom line by 2023, two of the people told Reuters.
The moves come on top of a turnaround plan unveiled in July and are likely to include cutting Nissan’s range of cars and the array of product options and trims in each line, slashing jobs mostly at head offices in the United States and Europe, and reducing advertising and marketing budgets, they said.
Most of the planned cuts and measures to enhance efficiency were presented to Nissan’s board in November 2019 and received its general blessing, sources said. A Nissan spokeswoman declined to comment on new restructuring measures or the view that weaker-than-expected sales were the catalyst for a global overhaul.
Under Ghosn, Nissan embarked on a global expansion, boosting capacity to add new models, driving more decidedly into markets such as India, Russia, South Africa and Southeast Asia and spending heavily on promotions and marketing to hit targets.
Now, many of those models are missing sales goals and executives at Nissan’s Yokohama headquarters estimate up to 40 percent of its global manufacturing capacity is unused, or under-used.
In July, Nissan said it would cut 12,500 jobs from 14 sites around the world, from the United Kingdom to Spain, Mexico, Japan, India and Indonesia and reduce its model range by 10 percent.
There are indications that, the axe was also likely to fall at Nissan’s North American head office in Tennessee and its European headquarters in Geneva, as they were bloated with high-spending sales and marketing staff.
MIKE OCHONMA
