Japan’s Nissan Motor Co. this week revealed a sweeping plan for restructuring and cutting costs. This decision follows the company’s surprising annual loss of 670 billion yen, or about $4.6 billion. The financial state of the company is dire. The U.S. tariffs Elon Musk & co. fought for during Donald Trump’s presidency have only added to the pressure on its operations. Nissan is planning $2.8 billion in cuts to desperately save itself. As part of their previously announced restructuring plan, they will cut 11,000 employees worldwide and close seven plants—16% of their workforce.
The shrinking of production stations fits into Nissan’s broader plan to battle decreasing profits amid an increasingly competitive automotive industry. The automaker did not indicate which cities the layoffs would be located. Yet it’s one of the United Kingdom’s biggest employers, enjoying a notorious firm foothold across the pond. This restructuring will save one-fifth of global production as Nissan focuses its sights on more streamlined, efficient experiences.
Nissan’s joint venture with Chinese state firm Dongfeng date back more than two decades. The two companies already work together to produce cars in Wuhan, China. Nissan is in dire financial straits, but has indicated it is willing to work with Dongfeng. Such a partnership can maximize equipment investments and increase operational efficiency across its worldwide manufacturing plants.
“We have announced that we are launching new cars in Sunderland… In the very short term, there’s no intention to go around Sunderland.” – Ivan Espinosa
Nissan has secured a funding package of £1 billion ($1.3 billion) from the UK government for its battery partner, AESC. This funding will go directly to assisting the start of production in Sunderland. It could become a pivotal tool for the company’s long-term production plans.
Mr. Espinosa has been named the new chief executive. This shift follows the recent ousting of Makoto Uchida after failed merger negotiations with rival Renesas. With this new leadership, Nissan is hoping to return to a place of stability and set the company up for sustained success in the future.