Nissan steps up job-cut, 10,000 more to go globally
Nissan's President and Chief Executive Officer Hiroto Saikawa is struggling to turn the company around after the fallout with former CEO Carlos Ghosn, according to Radio France Internationale or RFI reports today(July 24).
The Japanese automaker plans to slash more than 10,000 jobs in a cost-cutting move to address its financial problems. The company’s profits have fallen to a near-decade low, and its alliance with automaker Renault has been under strain since the ouster and arrest of Ghosn, who also served as chairman of the French company.
Details of the job cuts at Nissan will be announced along with the company's first-quarter earnings results tomorrow. It will mainly target workers at underused factories in South America, and comes on the heels of the 4,800 job cuts announced in May. It currently has a workforce of about 139,000.
In May, Nissan forecast a 28 pe cent drop in annual operating profit, after a 45 per cent plunge the previous year, and warned of "a difficult business environment" for the next 12 months.
The company saw declining sales in the United States, where Ghosn had pushed aggressively for market share.
Saikawa needs to address the strained ties with Renault, which owns 43 per cent of Nissan, though the France government has said it is willing to cut its stake in Renault, to improve the relationship.
Saikawa kept his job in a vote at an annual shareholders meeting in June, though he had to fight off advisory firms urging shareholders not to reappoint him, saying that he was groomed for leadership by Ghosn.
Ghosn on the offensive
The former CEO is currently under house arrest in Tokyo, and is reportedly suing Nissan in a Dutch court for "improper termination" of his contract.
Ghosn is accusing Nissan of breaching his contract as an employee of NMBV, the joint subsidiary based in the Netherlands, and seeking up to 15 million euros in damages.
He is awaiting trial in Japan on charges of financial misconduct. He was held in jail for over 100 days before being granted bail and fired from all his management roles.
Ghosn is accused of under-reporting millions of dollars in income at Nissan and of using company funds for personal expenses. He has denied all charges.
Nissan Motor (Thailand) Co Ltd has refused all requests for comment on the matter.
“That has to wait till Thursday's announcement,” a source at Nissan Motor (Thailand) Co Ltd said.