Global workforce reduction of approximately 20,000 jobs announced by Nissan, according to reports.
Set for a Shockwave: Nissan Slashes Global Workforce by 15% and Closes Plants
Get ready for some major changes in the auto industry! Rumors swirling in Japan suggest that Nissan is preparing to axe 20,000 jobs globally, making up a whopping 15% of its worldwide workforce. If these reports turn out to be true, this move will surpass the 9,000 job cuts Nissan announced back in November and bring its total headcount down to around 130,000 employees.
The carmaker remains tight-lipped about these developments, but they are expected to reveal full year results covering the period from March of last year on Tuesday. These results are predicted to show a net loss of up to £3.8 billion due to write-downs on the value of their operations. This loss would follow Nissan's recent record-setting net loss of $5 billion for the fiscal year ended in March of 2022.
Probable Fate of Sunderland's Production Facilities
As for the 6,000 workers employed at Nissan's sprawling Sunderland manufacturing operations, it's still unclear whether the impending job cuts and potential production reductions of up to 20% include their roles. Nissan has been on a rollercoaster ride with Brexit in the past, claiming the plant's future in question and proceeding with investment plans. Over the past few years, the company has invested £2 billion in Sunderland alone. This year, they secured UK government money for a new electric powertrain manufacturing facility in the city.
Advocating for More Aid
Just last month, a senior Nissan executive, Alan Johnson, expressed concerns about the UK's competitiveness, arguing that the country is "not a competitive place" to build cars. Reminiscent of the bargaining position taken by multinational companies eager for incentives and subsidies, Johnson argued that the UK needed to offer more aid to attract investment.
Nissan's Multiple Challenges
Make no mistake, Nissan is far from the only automaker facing difficulties. Apart from the ongoing tension surrounding US-UK trade tariffs of 25% on car imports, the company is also grappling with other challenges, such as a struggling electric car market and stiff competition from Chinese automakers. Although the vast majority of Nissan's cars made in the UK will be subject to a relatively lower tariff of 10% due to the recent UK-US trade deal, it's uncertain whether this will be enough to stimulate sales and safeguard the fate of the workforce.
Enrichment Details
- Nissan's restructuring efforts are not limited to job cuts but also include closing seven manufacturing plants worldwide.
- Nissan's total number of plants is set to decrease from 17 to 10 by the end of 2027 due to these closures.
- Apart from the job cuts, Nissan is also facing challenges such as slow electric car uptake, high restructuring costs, and competition from Chinese automakers.
- Most of the cars produced at the Sunderland plant are for export to Europe and the domestic UK market.
- Although the UK-US trade deal reduces the tariff on Nissan's cars made in the UK to 10%, the majority of their cars are not currently shipped to the US.
The restructuring plans of Nissan, encompassing job cuts and closures of manufacturing plants, may impact industrial finance and transportation, particularly the automotive industry. If these changes lead to a reduction in the production of vehicles in the Sunderland plant, it could have a ripple effect on the broader UK transportation infrastructure. The success or failure of Nissan's restructuring efforts may also influence future investment decisions in the industry by both domestic and international entities.
