Monday February 9, 08:02 AM
Nissan sees big loss, to cut 20,000 jobs
By Daniel Rook
TOKYO (AFP) - Nissan Motor Co (Berlin: NISA.BE - news) . on Monday announced 20,000 job cuts and warned of its first annual loss since Carlos Ghosn took the helm of the Japanese automaker almost a decade ago.
Nissan blamed the global economic crisis for an expected net loss of 265 billion yen (2.9 billion dollars) in this financial year to March -- a dramatic reversal from the previous year's profit of 482 billion yen.
Ghosn said the depth of the global economic crisis had surpassed Nissan's expectations.
"The global auto industry is in turmoil. Nissan is no exception," said Ghosn, who also heads France's Renault (Paris: FR0000131906 - news) .
Japan's third largest automaker, which is 44 percent owned by Renault, said it would slash its global workforce by 8.5 percent to 215,000 in the next financial year to March 2010.
It forecast an operating loss of 180 billion yen this year -- its first since Renault parachuted in Ghosn to rescue the company from the brink of bankruptcy in 2000. Last year Nissan made an operating profit of 790.83 billion yen.
"In 1999 Nissan had a crisis. Nissan was doing badly while many other car manufacturers were doing very well. Today everybody has a problem," Ghosn said.
Nissan posted a net loss of 83.2 billion yen for the fiscal third quarter to December, blaming the global economic slowdown and the strong yen.
The automaker is cutting its global production by 20 percent this financial year compared with its previous target to meet sharply weaker demand.
The group made a third-quarter operating loss of 99.2 billion yen as revenue tumbled 34.4 percent to 1.82 trillion yen.
Nissan sold 731,000 vehicles worldwide in the third quarter, down 18.6 percent from a year earlier.
As part of efforts to slash costs, the company will scrap its bonuses for the board of directors this year. From March, salaries for top management will be reduced by 10 percent until the situation shows clear signs of improvement.
Nissan will also suspend its joint participation in a new factory in Morocco with Renault. The Tangiers factory was due to start operating in 2010 with an investment of 600 million euros.
Nissan said it would continue participation with Renault in another joint factory in the southern Indian city of Chennai, but it will scale back plans to step up production there.
Ghosn said Nissan had no plans to shut existing plants permanently, adding, "We don't think this crisis is going to last forever."
All Japanese carmakers have seen a drastic turnaround in their fortunes in recent months as recessions in major markets have battered demand for cars. World number one Toyota is bracing for its first ever annual loss.
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