Nissan Plans 15% Workforce Cut, Factory Closures for Efficiency

Nissan Motor is reportedly considering the closure of several factories in Japan and overseas as part of a cost-cutting initiative. The automaker is planning to shut down its Ota and Yokohama plants in Japan, which would reduce its total number of vehicle assembly plants in the country to three. Additionally, Nissan is evaluating the possibility of halting production at its factories in South Africa, India, and Argentina, while also reducing the number of plants in Mexico. This move comes as the company aims to streamline its operations and improve profitability amid challenging market conditions.

The potential closures are part of a broader restructuring effort that could see Nissan reduce its global workforce by approximately 15%. The company has not yet officially confirmed these plans, but industry insiders suggest that the decisions are being carefully considered as part of a long-term strategy to enhance operational efficiency and financial performance. The Ota plant, which began operations in 1961, and the Yokohama plant, operated by Nissan Die Casting, are among the facilities under consideration for closure. These closures would significantly impact Nissan's manufacturing footprint in Japan.

In addition to the domestic closures, Nissan is also looking at halting production in several overseas markets. The company is considering shutting down its factories in South Africa, India, and Argentina, and reducing the number of plants in Mexico. This move is part of Nissan's plan to consolidate its global production base from 17 to 10 locations, as announced earlier this week. The company aims to focus on more profitable markets and streamline its operations to improve overall efficiency.

Nissan's new CEO, Ivan Espinosa, has introduced a series of aggressive reforms aimed at reviving the company's fortunes. These reforms mark a departure from the strategies of the previous CEO, Carlos Ghosn, who had focused on global expansion and refused to close domestic plants. The company's sales have declined significantly in recent years, with a 42% drop in sales from 3.3 million vehicles in the 2017 fiscal year to 3.3 million vehicles in the 2024 fiscal year. Nissan has already announced plans to consolidate the production of its Frontier and Navara pickups in Mexico, moving production from Argentina and Mexico to the Civac plant in Mexico.

Nissan has responded to reports of potential factory closures by stating that such speculation is not based on official company information. In a statement, the company said, "We will not comment further on this matter at this time. We are committed to maintaining transparent communication with our stakeholders and will provide updates as necessary." The company's official stance reflects its cautious approach to announcing significant changes, ensuring that all stakeholders are informed in a timely manner.