The Nissan Motor Co., Ltd. said last Tuesday that it aims to cut 1,500 jobs through an early retirement program in a move aimed at shoring up drooping earnings.
The early retirement program of the third biggest Japanese automaker will be extended to some 12,000 employees in Japan and the impact on earnings will be announced this Thursday, said the company spokesman Simon Sproule. “It is one of the measures we have taken recently to help boost performance,” added Sproule. “It’s about making sure structurally we’re right sized.”
The program follows a similar retirement program in the United States earlier this year that had targeted 300 job cuts but ended with about 775 workers accepting. Nissan slashed its profit forecast 12 percent for the fiscal year through March after seeing a 22 percent drop in earnings in the last quarter of 2006.
The backtracking strained President Carlos Ghosn to declare his company in a “performance crisis.” Ghosn was once credited for saving the automaker which then near bankruptcy. In another blow, Nissan said earlier this year it may miss its target of selling 4.2 million vehicles globally in the fiscal year ending March 2009 as part of a three-year restructure plan.
The Japanese automaker will accept applications for early retirement between June 1 and March 2008. The program will be offered to full-time employees over 45 years of age with at least five years of service to the company. In a statement, the automaker said the program was designed to “balance staffing levels with assembly requirements.”
However, the weak performance of Nissan’s product lines was blamed on a dearth of new models in North America and sluggish sales in Japan. Moreover, experts in the industry predict it would take a longer time for Nissan to meet its target.
Tokyo-based Nissan, which previously marketed its product lines under the Datsun name, also intends to move its headquarters to Yokohama, Kanagawa. According to the company, the construction of the new facility will start this year. Nissan’s new facility will be ready by 2010.
Nissan is included in the top three Asian rivals of Detroit’s Big Three. It became even stronger in 1999 when it entered an alliance with France-based Renault S.A. The Japanese automaker is famed for its creation of Nissan Xterra parts and VQ engine units.
The Nissan VQ engines of the company have been featured among Ward’s 10 Best Engines for 12 straight years, since the award started. The new generation VQ will be featured on the new Infiniti G35, the future GT-R and the 2007 Nissan 350Z.
The automaker will also unleash the new generation 2.5VQ 4-cylinder engine that will power the next generation Altima and likely will power the forthcoming SPEC-V 2007 Sentra.