Nissan to slash 20,000 jobs, sees annual loss

updated 7:03 p.m. ET Feb. 9, 2009

TOKYO - Nissan announced 20,000 job cuts Monday, the deepest reduction among Japan’s automakers in battling the global downturn, as it forecast its first annual loss in nine years.

Chief Executive Carlos Ghosn said the latest problems were industrywide and due to the global economic slump and the appreciating yen. They didn’t mean Nissan Motor Co. was reverting to its money-losing status that required a bailout from alliance partner Renault SA in 1999, he said.

The last time Japan’s third-largest automaker racked up an annual net loss was for the fiscal year that ended March 2000. Then, a bloated Nissan had lost money in seven of the previous eight years.

“In 1999, we were alone. In 2009, everybody is suffering,” Ghosn, also chief executive at Renault, said at Nissan’s Tokyo headquarters.

Nissan now expects a 265 billion yen ($2.9 billion) net loss for the fiscal year through March — joining a raft of other Japanese corporate giants, including Toyota, Toshiba and Sony, in slashing jobs and projecting annual losses.

As a key step in weathering the downturn, Ghosn said Nissan will cut 20,000 jobs worldwide, or 8.5 percent of its 235,000-strong global work force, by March 2010.

Some 12,000 of the job cuts will be in Japan, including group companies, and the rest will be overseas. The company did not give a further regional breakdown.

The maker of the Z sports car and the March compact sank to a loss of 83.2 billion yen for the October-December period from a 132.2 billion yen profit a year earlier. Quarterly sales plunged 34.4 percent to 1.817 trillion yen.

Mamoru Katou, analyst with Tokai Tokyo Research, remained pessimistic about Nissan’s recovery prospects.

Toyota and Honda, which both have gas-electric hybrids going on sale this year, are better positioned to boost sales when the recovery kicks in, he said. Nissan does not have a comparable hybrid model.

Nissan’s job cuts in Japan — more aggressive than its domestic rivals — show its strategy to take production overseas and take advantage of the soaring yen but that would make the Nissan brand less popular in its home market, Katou said.

“The job cuts will hurt Japanese parts-makers, too, and in the long run diminish the Nissan brand value in Japan,” he said.

No. 1 automaker Toyota Motor Corp., which is projecting a 350 billion yen ($3.85 billion) net loss for the fiscal year through March, its first such loss since 1950, is reducing contract workers in Japan from 8,800 in June last year to 3,000 in March.

Honda Motor Co., Japan’s No. 2 automaker, is faring relatively better and is expecting to stay in the black, with a 80 billion yen ($879 million) profit. But it will cut the number of temporary workers at its Japan plants from 3,100 to zero by the end of April.

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