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18 October, 1999Plant closures, big spending cuts and management changes are part of a radical overhaul at Japan's second largest carmaker.
JAPAN: Nissan Motor Co. announced on October 18 radical restructuring plans which will include a 14% reduction in its global workforce, or 21,000 employees, and closure of three assembly plants and two engine factories in Japan. The plan will also cut Nissan's purchasing costs by 20%, reduce the number of product platforms, and reduce by almost half its parts and materials suppliers.
The restructuring plan was designed by Carlos Ghosn, chief operating officer at Nissan, who was appointed by French carmaker Renault earlier this year when it acquired a 36.8 % stake in Nissan.
Most of Nissan's job losses will occur in Japan, with expected cuts of up to 4,000 jobs in manufacturing and 6,500 in Japanese dealerships. Worldwide, another 6,000 jobs will disappear in sales and administrative positions, and 5,000 will be spun off to other companies. Assembly lines at Murayama, Shatai Kyoto and Aichi Kikai Minato will be closed, as well as the powertrain operations of Kyushu and Kurihama. Factory shifts will be changed from the present 3,600-hour annual production system to 4,400.
According to the plan, total capacity will be cut by 30%. Within the next three years, the present 24-platform car portfolio will be reduced to 15, and then to 12 by the year 2004. As for the companies supplying Nissan, they will be cut from the present 1,145 to 600 by the year 2002.
Starting next year, Nissan intends to put into action a compensation system oriented on job performance, and include stock options and bonuses based on achievement.
This long-expected restructuring plan will obviously have serious consequences for Nissan workers worldwide. Having anticipated restructuring at Nissan, the IMF brought together Nissan and Renault union officials in early July for discussion on future cooperation between the unions concerned. Based on the contact established, unions at Nissan and Renault have been working together closely.
The restructuring plan was designed by Carlos Ghosn, chief operating officer at Nissan, who was appointed by French carmaker Renault earlier this year when it acquired a 36.8 % stake in Nissan.
Most of Nissan's job losses will occur in Japan, with expected cuts of up to 4,000 jobs in manufacturing and 6,500 in Japanese dealerships. Worldwide, another 6,000 jobs will disappear in sales and administrative positions, and 5,000 will be spun off to other companies. Assembly lines at Murayama, Shatai Kyoto and Aichi Kikai Minato will be closed, as well as the powertrain operations of Kyushu and Kurihama. Factory shifts will be changed from the present 3,600-hour annual production system to 4,400.
According to the plan, total capacity will be cut by 30%. Within the next three years, the present 24-platform car portfolio will be reduced to 15, and then to 12 by the year 2004. As for the companies supplying Nissan, they will be cut from the present 1,145 to 600 by the year 2002.
Starting next year, Nissan intends to put into action a compensation system oriented on job performance, and include stock options and bonuses based on achievement.
This long-expected restructuring plan will obviously have serious consequences for Nissan workers worldwide. Having anticipated restructuring at Nissan, the IMF brought together Nissan and Renault union officials in early July for discussion on future cooperation between the unions concerned. Based on the contact established, unions at Nissan and Renault have been working together closely.