TOKYO (AP) - Nissan is implementing significant changes to its operations in the United States as part of a broader strategy to regain profitability. This includes a reduction in production at its plants and offering buyouts to some factory workers. The company's latest actions are a continuation of its recovery plan, initially announced two months ago, which aims to cut 9,000 jobs globally due to substantial quarterly losses attributed to declining sales and accumulating inventory.
At the Smyrna plant in Tennessee, where Nissan manufactures the Murano, Pathfinder, Rogue sport-utility vehicles, and the Infiniti QX60 luxury model, changes in production shifts are being implemented. Specifically, one production line will continue to operate with two shifts, while the second line will be consolidated to a single shift. Similarly, adjustments are being made at the Canton plant in Mississippi, which is responsible for manufacturing the Altima sedan and Frontier pickup; one line's speed will be decreased, and another will be consolidated. In the Decherd plant, also located in Tennessee and focused on engine production, shift modifications will occur gradually, with some shifts being maintained while others will be reduced by one shift.
Nissan's job reduction initiative amounts to approximately 6% of its global workforce, which comprises over 133,000 employees. Additionally, the company intends to decrease its global production capacity by 20%. The workforce cuts, which will include reductions in various markets, are a crucial aspect of Nissan's strategy to enhance operational efficiency and flexibility. The automaker stated, "Nissan is taking urgent measures globally to turnaround its performance and create a leaner, more resilient business capable of swiftly adapting to changes in the market."
In related news, Nissan is collaborating with Japanese competitor Honda Motor Co. to establish a joint holding company aimed at integrating their businesses. This partnership is set to be implemented by 2026. The two companies initially announced their joint effort to develop electric vehicles in March and have since expanded their collaborative plans, with a definitive agreement expected by June. This indicates a strategic shift towards innovative solutions in the automotive industry, particularly focusing on electric mobility.
Nissan's decision to make these changes comes ahead of the anticipated release of its financial results for the October-December quarter, scheduled for February 13. Following reports regarding the new operational strategies in the U.S., Nissan's stocks experienced a 2% increase in Tokyo trading. The automaker is navigating a challenging landscape and is focused on reshaping its business to better address consumer needs and market dynamics.
Yuri Kageyama is on Threads: https://www.threads.net/@yurikageyama
