UK production threat as Nissan cuts 20,000 jobs

Nissan is cutting 20,000 jobs amid sliding sales - which could be bad news for its Sunderland plant...

Last Updated: 06 Nov 2012

More bad news for the ailing auto industry: Nissan has announced plans to cut another 20,000 jobs, about 8.5% of its workforce – and although it didn’t specify exactly where the axe will fall, UK workers will be feeling pretty nervous today. CEO Carlos Ghosn said the global auto industry was in turmoil and the company’s worst economic assumptions had been ‘met or exceeded’; with his company set to record a £2bn loss in the current financial year, he’s been forced to reduce production and cut costs drastically in a bid to keep the company’s head above water.

Nissan, Japan’s third-biggest carmaker, is planning to trim its workforce to about 215,000 with this latest set of cuts, which will take place between March 2009 and March 2010. Although most of these job cuts are apparently likely to be in Japan, there has to be a good chance that the UK will be affected: Nissan announced 1,200 job cuts at the Sunderland plant last month, but this figure could now rise as Nissan looks to find extra cost savings. And even those who don’t get laid off could well find themselves working shorter hours – Nissan said it had already opened talks with the unions about this.

Of course it’s no great surprise that Nissan is struggling, given that the global car sales are well and truly in the doldrums. Nissan sold 731,000 cars in the final quarter of 2008, 19% down on last year’s figure – so instead of a 132bn yen profit, it finished the period with an 82bn yen loss. Indeed, most car-makers are in a similar position: Japanese rivals Toyota and Honda, plus the likes of GM, BMW and even Porsche are all cutting production. With no end in sight to the current auto industry gloom, cost-cutting is becoming an increasingly urgent priority. Which is rotten news for the thousands of people the industry employs...

With the CBI suggesting this morning that 47% of large British businesses have been forced to shed staff in recent months, as companies struggle to access credit, it's turning into another grim day for the UK labour market...

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