Nissan Motor Co. Chief Executive Carlos Ghosn speaks during a press conference at Nissan’s Tokyo headquarters in Tokyo, Japan, Monday, Feb. 9, 2009.
Today, CEO Carlos Ghosn announced dramatic cutbacks throughout Nissan Motor Co. as the Japanese automaker prepares to close out the fiscal year with a staggering loss. In sharp contrast to the $1.76 billion profit predicted earlier this year, Nissan now expects to finish 2008 with a 265 billion yen ($2.91 billion) net loss. With revenue dropped a full 34% to 1.8165 trillion yen, Nissan shares fell 5.8% before Ghosn even released the results.
Rapidly shifting into damage control mode, Ghosn followed the dismal financial report with the revelation of several drastic cost-cutting maneuvers. In addition to courting several governments in hopes of securing some sort of federal aid, Nissan also plans to scale back production, reducing the number of new-product launches from 60 to 48. In addition, Nissan also plans to cut its global workforce by 20,000 jobs by the close of 2009, simultaneously aiming to shave 20% off of labor costs altogether. Construction of Nissan’s new plant in Chennai, India will also be temporarily suspended, as will Nissan’s involvement in the new Renault factory in Tangiers, Morocco. (hat tip Rock517)
Speaking during a brief press conference following his presentation of the Q3 results, Ghosn explained, “Nissan is operating in an environment in which we are hit with three challenges at one time: the credit crisis, economic recession and strengthening yen.” Added Ghosn, “Systematically, the worst scenario happened.”