Nissans Market Slumps Result to Job Cuts

By: RyanThomas

Amid the shrinking market, the Nissan Motor Co. has announced the slashing of up to 1,500 blue and white-collar jobs in Japan through a voluntary retirement programme for its employees. The scheme, set to begin this coming June, will be open to workers aged 45 and above in non-managerial posts, a Nissan spokesman said. It will be the very first job cut Nissan will be entertaining in its hometown.

Japan's third-biggest automaker has seen its domestic sales of non-mini vehicles dropped in the middle of tough competition thus forcing the company to announce a cutback in production at two domestic auto plants from April to June. Additionally, Nissan also closed down one of three lines at another factory in southern Japan just last September. The closure was attributed to the slow sales of the Nissan Teana high-end sedan.

The Teana, a front wheel drive mid-size car, was introduced in 2003. The car is exported as the Maxima and the Cefiro to specific markets. It shares the same platform with the North American Maxima, Altima and the Presage. Under the hood of the Teana is either the 2.3 or 3.5 liter engine which blends well to the automatic transmission. It is also equipped with trusted auto parts like the , engines, suspensions, brakes, radiator, and more. The car is offered in four trim levels - the 230JK, 230JM, 230JS, and 350JS.

"The program will probably cost Nissan about 20 billion yen ($169 million) and we don't expect much of an impact on earnings," said Koji Endo, a senior auto analyst at Credit Suisse Group in Tokyo, who rates Nissan shares as "neutral."

"The program is part of the number of actions to boost performance," said Simon Sproule, the Nissan North America Corporate Communications Vice President. Nissan will also release 11 new or redesigned vehicles this fiscal year.

The automaker has offered a similar program in the United States, where more than double the expected number of employees accepted the package. A total of 775 workers agreed to leave the Smyrna, assembly plant and Decherd engine and transmission factory, both in Tennessee, the company said last month.

Nissan turned to buyouts after U.S. sales of its cars and light trucks dropped 5.3 percent last year to 1.02 million and that is its first annual decline since 2001. Nissan's U.S. sales increased by 3.2 percent during this year's first three months. The U.S. accounts for almost 30 percent of the automaker's global sales.

Nissan, held 44 percent by Renault SA of France, introduced a few new models last year. Moreover, it endeavors to produce new product lines soon. Also, the automaker recently cut jobs in the US, where its sales slumped last year, where it said 775 workers at two Tennessee plants had accepted voluntary retirement last month.

Chief executive Carlos Ghosn had promised last month to draw up additional measures to help Nissan meet its targets, but the company has missed the targets. Nissan slashed its annual profit forecast after seeing a 22 percent decline in earnings in the October-December quarter. The backtracking forced Ghosn to declare his company in a "performance crisis."

Earlier this month, Nissan said it may miss a key sales target it aimed to hit next fiscal year, in another blow to Ghosn's comeback plans. The Japanese automaker is aiming to sell 4.2 million vehicles worldwide in the fiscal year ending March 2009 as part of its three-year revival plan.

But weak performance in 2006, blamed on a dearth of new products in North America and slow sales in Japan, may mean it might take longer to meet the target, said a Nissan spokeswoman who spoke on condition of anonymity.

The company is due to announce full-year results and updates to the "Nissan Value-up" business plan on April 26.

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