Nissan Motor Co., Ltd. said last Tuesday it intends to cut 1,500 jobs through an early retirement program in a move aimed at shoring up falling profits.
The early retirement program of the third-largest Japanese automaker will be extended to some 12,000 employees in Japan and the impact on earnings will be announced on Thursday, company spokesman Simon Sproule said. “It’s one of the measures we’ve taken recently to help boost performance,” Sproule added. “It’s about making sure that structurally we’re sized right.”
The program follows a similar retirement program in the United States earlier this year that targeted 300 job cuts but ended with about 775 workers taking on. Nissan cut its profit forecast by 12 percent for the fiscal year through March after seeing a 22 percent drop in profit in the final quarter of 2006.
The pushback forced Chairman Carlos Ghosn to declare his company in a “performance crisis.” Ghosn was once credited with saving the automaker from the brink of bankruptcy. In another blow, Nissan said earlier this year that it may miss its target of selling 4.2 million vehicles worldwide in the fiscal year ending March 2009 as part of a three-year restructuring plan.
The Japanese automaker will accept early retirement applications between June 1 and March 2008. The program will be offered to full-time employees age 45 and older with at least five years of service with 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 attributed to a shortage of new models in North America and sluggish sales in Japan. Furthermore, industry experts predict that it will take longer 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, construction of the new facility will begin this year. The new Nissan facilities will be ready by 2010.
Nissan is listed among the top three Asian rivals to Detroit’s Big Three. It became even stronger in 1999 when it partnered with France-based Renault SA. The Japanese automaker is famous for its creation of Nissan Xterra parts and VQ engine units.
The company’s Nissan VQ engines have been among Ward’s Top 10 Engines for 12 consecutive years, since the award began. The new generation of VQ will be introduced in the new Infiniti G35, the future GT-R and the 2007 Nissan 350Z.
The automaker will also unleash the next generation of 2.5VQ 4-cylinder engines that will power the next generation Altima and likely power the upcoming SPEC-V 2007 Sentra.
