Nissan faces crisis with 11,000 layoffs and seven factory closures

Japan's Nissan Motor Co. is facing challenging times as it considers drastic actions to address low sales in major markets, including the United States and China. The company recently announced plans to cut 11,000 jobs as part of a cost-reduction strategy aimed at consolidating its global production capacity from 17 plants to 10. This decision comes on the heels of significant leadership changes at the company, including the appointment of new CEO Ivan Espinosa, following the collapse of merger talks with rival Honda, which expired in February. The automaker's struggle is highlighted by its annual loss of 670 billion yen, a result of increasing competition, especially in the Chinese market, which is the world's largest car market. As part of this restructuring, Nissan is evaluating the potential closure of two assembly plants in Japan, namely the Oppama and Shonan factories, alongside evaluating its overseas facilities in countries like Mexico, South Africa, India, and Argentina. With these moves, Nissan aims to streamline operations and restore profitability, as the current strategy marks a shift from the aggressive expansion plans previously proposed by former CEO Makoto Uchida. Espinosa's approach reflects a direct response to Nissan's declining market position and reduced vehicle sales, which have plummeted by 42% since the 2017 business year. The announced job cuts represent approximately 15% of its global workforce, signaling a dramatic shift in strategic direction as Nissan confronts ongoing external pressures including tariffs and competitor pricing strategies. Given the complexities of the automotive market, the decision to lay off workers and shutter facilities is a tough but necessary step for Nissan as it seeks to stabilize and eventually revitalize its operational framework. Nissan's considerations also align with earlier announcements of production consolidations, such as the merging of production of Nissan Frontier and Navara pickups into a unified hub in Mexico. The impending job cuts and factory closures could significantly impact the global automotive industry and labor markets, raising questions about the future of Nissan's competitiveness in an evolving landscape. Communicating transparent intentions with stakeholders, Nissan emphasizes that it will keep them informed of developments regarding its factory operations. Clearly, this critical juncture will determine Nissan's trajectory in the automotive market moving forward.