ALL NEWS

Nissan to cut production capacity by 20% after suffering worst year since 2009

May 28, 2020, 5:43 AM
File photo taken March 12, 2019, in Yokohama shows vehicles of Nissan Motor Co. The Japanese automa...
File photo taken March 12, 2019, in Yokohama shows vehicles of Nissan Motor Co. The Japanese automaker said April 28, 2020, it expects to post a net loss of up to 95 billion yen ($887 million) for fiscal 2019 due to the coronavirus pandemic's impact on sales of vehicles and parts, its first red ink in 11 years. (Photo by Kyodo News via Getty Images)
(Photo by Kyodo News via Getty Images)

    (CNN) — Nissan committed on Thursday to slashing production capacity by 20% and closing a plant in Spain as part of a sweeping overhaul announced after the Japanese carmaker revealed its first annual operating loss in more than a decade.

The company posted an operating loss of 40.5 billion yen ($376 million) for its fiscal year ended in March, compared to an operating profit of 318 billion yen ($2.9 billion) for its previous fiscal year. It was the company’s worst performance since 2009.

More pain could be on the way. Given the uncertainty surrounding the coronavirus pandemic, “it is difficult to reasonably forecast an outlook for fiscal year 2020 at this time,” CEO Makoto Uchida said at an earnings presentation on Thursday.

The announcements come one day after Nissan, Renault and Mitsubishi said they would deepen their alliance. The companies will make fewer models, share production facilities and focus on the existing geographic and technological strengths of each carmaker as they try to slash costs and ride out the coronavirus pandemic.

The world’s biggest carmaking alliance added that it would abandon the growth at all costs strategy pursued by former boss Carlos Ghosn, whose arrest in 2018 on financial misconduct charges threw the group into disarray. Ghosn has denied wrongdoing.

The new strategy boosted Nissan’s stock, which rose more than 8% in Tokyo on Thursday before earnings were released. Shares are down 29% for the year.

Nissan said the overhaul would allow it to reduce costs by 300 billion yen ($2.8 billion). The company will also slash the number of models it produces from 69 to fewer than 55, and close its vehicle manufacturing plant in Barcelona.

The Spanish government said it “regrets” Nissan’s decision and will try to persuade the company to keep the plant open, the Industry Ministry said in a press release.

Nissan said its car manufacturing plant in Thailand will become its single production base in Southeast Asia, after the company closed its Indonesia plant earlier this year.

Nissan, which was already suffering from slumping sales before the pandemic hit, said last year that it would cut about 12,500 jobs from its global workforce. On Thursday, Uchida declined to reveal if more jobs would be cut as part of the overhaul, saying that Nissan still needs to consult with unions and other stakeholders.

The Barcelona plant directly employs about 3,000 workers and some 20,000 other workers indirectly depend on the manufacturing there, a spokesperson for the Spanish government told CNN.

To “share the pain” caused by the overhaul, Uchida said he will take a 50% pay cut for the first half of the year, and other executives will see a 30% pay cut.

— Al Goodman contributed to this report.

The-CNN-Wire
™ & © 2020 Cable News Network, Inc., a WarnerMedia Company. All rights reserved.

Today’s Top Stories

All News

lake effect snow really did a number on the wasatch front this morning...
Chandler Holt

Back-to-back winter storms bring heavy snow, critical fire conditions to the West

Two winter storms in less than a week will bring more than a foot of snow to the mountains, wind gusts of over 70 mph leading to the possibility of a wall of dust and the high danger of fire to the central and western US.
12 hours ago
Erin mendenhall and two men are pictured at a podium speaking about crime statistics in salt lake...
Samantha Herrera

Project Safe Neighborhoods successfully lowering crime according to Salt Lake leaders

Crime in Salt Lake City has been the focus of Project Safe Neighborhoods for the past two years. Salt Lake City Mayor Erin Mendenhall praised the project.
12 hours ago
Utah's film festival...
Elizabeth Weiler

Utah’s film festival screens an all-Utah cast for Marylin Monroe film

SOUTH JORDAN, Utah — Aa film with an all-Utah cast and crew  has been selected by Utah’s Film Festival for a screening, part of the festival’s monthly screening series.  “Marilyn Monroe’s Last Press Conference”, is an independent film written and directed by Frank H. Cutler of Thunderbolt Alley Productions. According to Thunderbolt Alley Film, the […]
12 hours ago
Low water is pictured at the Great Salt Lake and a new bill is aiming to study the lake...
Dan Bammes

Senate passes Romney-sponsored bill to fund Great Salt Lake study

A bill to study the Great Salt Lake passed through the Senate with a unanimous vote on Wednesday. The bill would provide $5 million per year in funding.
12 hours ago
Help wanted sign is displayed in Deerfield, Ill., Wednesday, Sept. 21, 2022.  The number of availab...
Alicia Wallace, CNN Business

US economy added a robust 263,000 jobs in November

The unemployment rate held steady at 3.7%, according to the latest monthly jobs snapshot from the Labor Department, released Friday morning.
12 hours ago
The Pantone Color Institute has named Viva Magenta as its color of the year for 2023, saying it is ...
Faith Karimi, CNN

Pantone reveals 2023 Color of the Year and new exhibit

The Pantone Color Institute's choice for 2023, Viva Magenta, is described as an unconventional color for an unconventional time.
12 hours ago

Sponsored Articles

Spicy Homemade Loaded Taters Tots...
Macey's

5 game day snacks for the whole family (with recipes!)

Try these game day snacks to make watching football at home with your family feel like a special occasion. 
Happy joyful smiling casual satisfied woman learning and communicates in sign language online using...
Sorenson

The best tools for Deaf and hard-of-hearing workplace success

Here are some of the best resources to make your workplace work better for Deaf and hard-of-hearing employees.
Team supporters celebrating at a tailgate party...
Macey's

8 Delicious Tailgate Foods That Require Zero Prep Work

In a hurry? These 8 tailgate foods take zero prep work, so you can fuel up and get back to what matters most: getting hyped for your favorite
christmas decorations candles in glass jars with fir on a old wooden table...
Western Nut Company

12 Mason Jar Gift Ideas for the 12 Days of Christmas [with recipes!]

There are so many clever mason jar gift ideas to give something thoughtful to your neighbors or friends. Read our 12 ideas to make your own!
wide shot of Bear Lake with a person on a stand up paddle board...

Pack your bags! Extended stays at Bear Lake await you

Work from here! Read our tips to prepare for your extended stay, whether at Bear Lake or somewhere else nearby.
young boy with hearing aid...
Sorenson

Accommodations for students who are deaf and hard of hearing

These different types of accommodations for students who are deaf and hard of hearing can help them succeed in school.
Nissan to cut production capacity by 20% after suffering worst year since 2009