Nissan Announces Record 20,000 Layoffs

The slaughter in the automotive industry continues with relentless intensity. A few days ago, Toyota, the largest car manufacturer in the world, announced its first losses, and after a series of layoff announcements, Nissan joined the trend with a record 20,000 layoffs so far.

In addition to the global recession that has cut demand for new cars, the strengthening Japanese yen has further devastated already weakened profits. Nissan expects nearly three billion dollars in losses by the end of March, although it had anticipated a profit of 1.7 billion dollars as recently as October last year. The dividend has, of course, also been cut.

The company recorded a 31 percent drop in sales in the American market, but it is not alone in its sorrow as car sales in America have reached their lowest level since the early 80s, amid the highest unemployment since 1992, which has also brought domestic players (GM and Chrysler) to the brink of bankruptcy and into a situation where they are ‘begging’ for money from the government. How dire the situation is, is evidenced by this statement from Nissan’s CEO Carlos Ghosn: – Our worst expectations regarding the state of the global economy have been met or have turned out to be even worse. He named the main culprits as the drop in demand and the lack of credit lines, clearly two riders of the current apocalypse.

When it comes to Toyota, it announced last week that it expects losses three times greater than before, while Honda, the second-largest manufacturer, has cut its revenue estimates by 57 percent, to 875 million dollars, although the previous estimate spoke of two billion dollars. Mazda and Mitsubishi, of course, also expect losses. With such results, it did not take long for the first calls for help to be addressed to the Japanese government. The harbinger of death in this case was Ghosn, announcing that he would seek a cheap loan from the government given the collapse of domestic demand.

Nissan reported a loss of 875 million dollars as early as December last year, and the further strengthening of the yen by 17 percent against the dollar and 18 percent against the euro has reduced operational profit by 60 billion yen. In America, Nissan is already keeping its factories open only four days a week and intends to lay off 110 people.   (Vanja Figenwald)