Nissan Plans Cuts Without Resorting to Plant Closures
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Nissan Motor Co. plans to repair its flailing business without closing factories, according to people familiar with the matter, as it looks to streamline its finances before a capital tie-up with Honda Motor Co.
Nissan will instead focus on reducing and consolidating existing production lines both in Japan and overseas to cut costs, the people said, asking not to be identified because they’re not authorized to speak publicly. Employee work shifts may also be trimmed, the people said.
Previously announced plans to cut 9,000 jobs globally and reduce production capacity by 20% are making progress, they added.
Nissan’s latest crisis surfaced in November when it reported a 94% drop in first-half net income. The legacy automaker has struggled to keep up in an increasingly cutthroat industry, with a dearth of attractive models making it difficult to compete with gas-electric hybrids in the U.S. and battery-powered vehicles in China. Along with a heavy reliance on dealership incentives and a gloomy outlook for a sales recovery, the mounting challenges left Nissan in need of a lifeline.
Cue Honda, which agreed with Nissan in December to negotiate the terms of a capital tie-up that would see both companies combine their brands under a single holding company.
The pair said they would aim to put forward a framework for negotiations — including a share split for the holding company — by around late January, then finalize the deal in June. They plan to list shares in August 2026.
Nissan is taking steps to improve its performance, including the implementation of a structure to secure sustainable profitability and cash generation even with a projected annual sales of 3.5 million units by fiscal 2026, the company said in a statement. More details will be provided at a later date, it said.
Honda CEO Toshihiro Mibe said in December that Nissan’s recovery is a prerequisite for any kind of alliance, and that both companies need to be independently viable for integration to materialize. That’s sparked a wave of speculation about how Nissan can engineer enough of a revival to get a deal over the line.
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Nissan CEO Makoto Uchida has said previously that all options are on the table. Not outright shutting any factories may therefore irk Honda, which is looking for wholesale change from its smaller rival.
Honda is expected to take the lead in bringing the two automakers together under the one holding company and may give further details of its game plan as soon as this week.
Local media reports last week said Nissan plans to end production later this year of its AD compact van at a facility in Japan. Nissan has yet to publicly announce any details regarding job cuts.
Written by Tsuyoshi Inajima and Masatsugu Horie
