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Nissan CEO Makoto Uchida, struggling to recover from consecutive quarterly net losses, plans to close three factories within the next two years, reduce shifts at U.S. plants, cut executive positions by 20 percent, and seek new partnerships to sustain the Japanese automaker, Automotive News said.
On February 13, Uchida outlined these measures while updating the turnaround plan he first introduced in November, alongside reporting declining profits for the latest financial quarter, Nissan News said.
Amid mounting challenges, the Nissan Motor Co. chief also defended the board’s decision to end merger discussions with Honda Motor Co., a move both companies finalized earlier that day, according to The New York Times.
With the Honda merger no longer an option, Uchida is intensifying Nissan’s self-recovery plan, which aims to reduce jobs, production capacity, and billions of dollars in costs through March 31, 2027, Reuters said.
Regarding the previously announced 9,000 job cuts, Uchida confirmed that 6,500 will come from the manufacturing side, partly due to the closure of three plants, Drive.com said.
The first plant to close will be Nissan’s Thailand facility in the first quarter of the new fiscal year, starting April 1. The second closure will occur between October and December, with the third plant scheduled to shut down by the fiscal year ending March 31, 2027. Uchida did not specify the locations of these plants, according to Transport Topics.
Additional reductions will be achieved through shift changes, including cuts to shifts at Nissan’s Smyrna, Tenn., and Canton, Miss., assembly plants, as previously reported by Automotive News late last year, the publication said.
The company also plans to eliminate another 2,500 jobs in sales and administration divisions worldwide, a move confirmed by sources within Nissan.
These changes are expected to reduce Nissan’s production capacity by 1 million units, dropping it from 5 million over the next two fiscal years. This includes the 500,000-unit reduction already enacted in the challenging Chinese market, where Nissan has seen declining sales, according to Reuters.
The company aims to raise its plant utilization rate to 85 percent, up from the current 70 percent, at least in its manufacturing facilities outside of China, an executive disclosed during a recent earnings call.
However, some analysts believe Nissan is not taking enough aggressive action, Automotive News reported.
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