Making cutbacks

Nissan has become the latest Japanese car maker to restructure its global business after it announced that it would cut 20,000 jobs worldwide amid weak sales.

Japan’s third-largest car manufacturer said that it expected a total loss of Y265bn (£2m) for the financial year to March 2009. The group also reported a net loss of Y83.2bn for the third quarter of 2008, after falling sales in the US and Japan affected global operations.

In response to the poor figures, the company plans to cut 8.5 per cent of its workforce by March. This accounts for 20,000 jobs globally and comes just a month after the group announced the loss of 1,200 staff at Europe’s most productive manufacturing facility in Sunderland.

In addition to job cuts, Nissan intends to reduce its output by 20 per cent this year.

Nissan’s directors will forego their bonuses in March and have their pay reduced by 10 per cent, while managers in Japan will see a 5 per cent cut to their salary.

The group has also frozen plans for a new factory in Morocco, which was to have been jointly developed with Renault. It also plans to implement further cost-cutting measures for the coming financial year.

Commenting on the revised strategy, Carlos Ghosn, president and chief executive of Nissan, said: ‘The additional actions we are announcing today will reinforce our ability to manage through this global crisis, but they also position Nissan for rapid, strong growth when conditions improve. An organisation needs to be flexible enough to meet the changing needs of the business and I am confident we have the talent, diversity and experience to lead Nissan effectively.’

Nissan’s announcement came on the same day that a €3bn (£2.6bn) loan support package was unveiled for Peugeot Citroën by the French government. The state will be lending money to the company over a period of five years on the condition that it does not close any factories in France.