Nissan to Close Seven Factories Cutting 20000 Jobs Amid Global Restructuring Plan

Nissan, the Japanese carmaker, is set to undergo major restructuring, announcing the closure of seven factories worldwide and a reduction of 20,000 jobs. The company faces a steep £3.4bn loss and plans to consolidate from 17 factories to 10 by 2027, in a bid to combat declining sales in the US and China. The restructuring aims to save £2.6bn while ensuring a return to profitability. This follows 9,000 job cuts announced last November, with a total reduction of 15% of its global workforce impacting manufacturing, research and development, sales, and administration roles.

The company has not disclosed the specific locations where the closures will happen, but Nissan’s Sunderland plant, its only facility in Europe employing 6,000 workers, is considered safe for now. Instead, the focus will be on optimising costs through a streamlined supply chain, consolidating suppliers, and rationalising research and development operations.

Nissan’s Chief Executive Ivan Espinosa, who took over last month, has emphasised a shift in strategy. Addressing the media, he stated that the goal is to prioritise profitability over volume, acknowledging the challenges in Nissan’s performance during the fiscal year of 2024. Espinosa underlined the urgency for internal improvements and a prudent approach to recovery in an uncertain global market environment.

The collapse of a $60bn merger with Honda, alongside the early repercussions of a trade war, added to Nissan’s difficulties. Despite these setbacks, the company is planning a strategic turnaround through significant cost-saving measures and investments in electric vehicles.

In a promising development for Nissan’s Sunderland base, its supplier AESC has secured £1bn in funding to expand the UK’s only gigafactory for electric car batteries. This government-backed initiative is expected to bolster the struggling UK automotive industry while ensuring a key part of Nissan’s future plans remains intact.

Nissan’s restructuring highlights a pivotal moment for the automotive industry as manufacturers adapt to shifting market demands and operational challenges. By reducing costs and streamlining operations, the company aims to position itself competitively in a rapidly evolving global market.