By Bettina Wassener / New York Times
HONG KONG — Nissan Motor on Monday joined Toyota, Mazda and Mitsubishi in forecasting a loss for the current financial year, and announced it was cutting 20,000 workers in one of the most aggressive cutbacks so far by a Japanese company since the start of the global downturn.
The announcement reflected a growing urgency among Japanese manufacturers as it becomes clear that the downturn and the strength of the yen is hitting Japan more severely than thought.
“In every planning scenario we built, our worst assumptions on the state of the global economy have been met or exceeded, with the continuing grip on credit and declining consumer confidence being the most damaging factors,” Nissan’s chief executive, Carlos Ghosn, said in a statement. “Looking forward, our priority remains on protecting our free cash flow and taking swift, adequate and impactful actions to improve our business performance.”
The past two weeks have seen sharp earnings revisions and job cuts by nearly all of Japan’s best-known companies, including Toyota, Sony, Hitachi, NEC, Hitachi and Panasonic. Toyota Motor, the world’s largest car manufacturer, on Friday forecast a net loss of 350 billion yen, or $3.8 billion, for the year, its first since 1950.
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Honda and Nintendo are among the few companies to still expect a full-year profit, but both sharply downgraded their expectations for the full year.
Nissan on Monday joined the spree of profit warnings, saying it now expected a full-year loss of 265 billion yen, or $2.9 billion, rather than the 160 billion yen profit it had projected, and announced a string of fresh measures to cut costs.
“Despite actions already taken during 2008 to respond to the global crisis, worsening conditions are prompting the need for further changes to the company’s cash management strategy, business structure and investment plans,” Nissan said in a statement. The company said it would cut 20,000 jobs from its 235,000-strong workforce, the third huge job cut announcement in Japan in less than two weeks.
The electronics makers NEC and Panasonic have announced large layoffs — NEC is shedding 20,000 staff and Panasonic is reducing its workforce by 15,000.
Japan’s automakers began to scale back production last year as the demand for cars shrank last year and U.S. sales tumbled and all have been forced to step up their cutbacks in recent months.
Nissan on Monday said it aimed to reduce production to 787,000 units by March 31 — down 20 percent from its previous production plan through shorter working hours and non-production days. It is also reducing capital spending and scrapping bonuses for directors.
During the last three months of 2008, Nissan lost 83.2 billion yen. During the same period a year earlier, it made a net profit of 132.3 billion yen. Nissan sold a total of 731,000 vehicles worldwide in the October-December period, down 18.6 percent from 2007.
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