Nissan sees loss, to cut jobs . . .
02-09-09, 12:05 AM
#1
Lead Lap
Thread Starter
Nissan sees loss, to cut jobs . . .
Article dated Feb. 9, 2009:
Just another victim of the global downturn, I guess.
Nissan to slash 20,000 jobs and sees annual loss
By YURI KAGEYAMA
AP Business Writer
TOKYO (AP) — Nissan sank into a loss for the fiscal third quarter and forecast its first full-year loss in nearly a decade on Monday, forcing Japan’s third-biggest automaker to slash 20,000 jobs, or 8.5 percent of its global work force.
‘‘The global auto industry is in turmoil, and Nissan is no exception,’’ Chief Executive Carlos Ghosn told reporters in Tokyo.
Nissan Motor Co. now expects a 265 billion yen ($2.9 billion) net loss for the fiscal year through March — the first time in nine years it’s tumbling into an annual loss.
The maker of the Z sports car and the March compact reported a net loss of 83.2 billion yen for the October-December period, a reversal from the 132.2 billion yen profit it earned the same period the previous year. That was its first quarterly net loss since it began reporting quarterly earnings in 2003.
Like other Japanese automakers, Nissan has been battered by the global slump and the U.S. credit crunch, which has undermined sales in its vital North American market. A strong yen also ate into profits by eroding overseas earnings when converted back to yen.
As one key step in response to the dismal results, Ghosn said Nissan’s global work force will be reduced by 20,000 through March 2010, to 215,000 from 235,000.
Directors on the board will forego bonus pay for the year ending March. Their salaries, as well as the salaries of corporate officers, will be reduced by 10 percent, while managers’ salaries will be reduced by 5 percent, the company said.
Nissan sold 731,000 vehicles worldwide in the quarter ending Dec. 31, down 18.6 percent from the same period a year earlier.
By YURI KAGEYAMA
AP Business Writer
TOKYO (AP) — Nissan sank into a loss for the fiscal third quarter and forecast its first full-year loss in nearly a decade on Monday, forcing Japan’s third-biggest automaker to slash 20,000 jobs, or 8.5 percent of its global work force.
‘‘The global auto industry is in turmoil, and Nissan is no exception,’’ Chief Executive Carlos Ghosn told reporters in Tokyo.
Nissan Motor Co. now expects a 265 billion yen ($2.9 billion) net loss for the fiscal year through March — the first time in nine years it’s tumbling into an annual loss.
The maker of the Z sports car and the March compact reported a net loss of 83.2 billion yen for the October-December period, a reversal from the 132.2 billion yen profit it earned the same period the previous year. That was its first quarterly net loss since it began reporting quarterly earnings in 2003.
Like other Japanese automakers, Nissan has been battered by the global slump and the U.S. credit crunch, which has undermined sales in its vital North American market. A strong yen also ate into profits by eroding overseas earnings when converted back to yen.
As one key step in response to the dismal results, Ghosn said Nissan’s global work force will be reduced by 20,000 through March 2010, to 215,000 from 235,000.
Directors on the board will forego bonus pay for the year ending March. Their salaries, as well as the salaries of corporate officers, will be reduced by 10 percent, while managers’ salaries will be reduced by 5 percent, the company said.
Nissan sold 731,000 vehicles worldwide in the quarter ending Dec. 31, down 18.6 percent from the same period a year earlier.
Last edited by dsp979; 02-09-09 at 12:56 AM.
02-09-09, 02:54 AM
#3
Lexus Fanatic
What do 20,000 laid-off workers mean? 20,000 potential new cars (probably from Nissan itself) that will NOT be sold. Laid-off workers can't buy new cars, which companies desperately need to sell to stay in buisness.
One of these days, the bean-counters at the auto companies will figure that out, and think twice before issuing those pink-slips. They can't have their cake and eat it, too.
One of these days, the bean-counters at the auto companies will figure that out, and think twice before issuing those pink-slips. They can't have their cake and eat it, too.
02-09-09, 08:55 AM
#5
Moderator
What do 20,000 laid-off workers mean? 20,000 potential new cars (probably from Nissan itself) that will NOT be sold. Laid-off workers can't buy new cars, which companies desperately need to sell to stay in buisness.
One of these days, the bean-counters at the auto companies will figure that out, and think twice before issuing those pink-slips. They can't have their cake and eat it, too.
One of these days, the bean-counters at the auto companies will figure that out, and think twice before issuing those pink-slips. They can't have their cake and eat it, too.
Salaries and wages expense is the number one or number two second to cost of goods sold that most companies incur.
Obviously you're not an accountant and that you don't understand the language of business. That's okay, that's what accountants are for...
02-09-09, 10:04 AM
#6
Lexus Fanatic
Hey, hey, hey, I take offense with your comment of bean-counters. I know your kidding but the reality is a company needs to survive and by laying off employees that alleviates some of the expenses that the company can no longer afford.
Salaries and wages expense is the number one or number two second to cost of goods sold that most companies incur.
Obviously you're not an accountant and that you don't understand the language of business. That's okay, that's what accountants are for...
Salaries and wages expense is the number one or number two second to cost of goods sold that most companies incur.
Obviously you're not an accountant and that you don't understand the language of business. That's okay, that's what accountants are for...
Last edited by mmarshall; 02-09-09 at 10:17 AM.
02-09-09, 10:10 AM
#7
Lexus Fanatic
Nissan workers tend to buy cars with deep discounts and little profit for the company. 
But really this bad news is more about the general economy and how it impacts all the auto makers.
But really this bad news is more about the general economy and how it impacts all the auto makers.
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02-09-09, 10:16 AM
#8
Lexus Fanatic
Yes, auto workers do get a discount, but with companies as large as Nissan and Renault and the number of workers they have, those "little" profits can add up. Fewer workers mean fewer sales.
02-09-09, 10:16 AM
#9
Nissan, like most car manufacturers, allows employees and their family to buy new cars at a large discount on list price. Even if all 20,000 employees bought two new cars the profits realised for the company would not go anywhere near offsetting the costs involved in their employment.
If the way to a profitable car business was as simple as employing people to buy your cars, GM and Ford would have workforces in the millions.
If the way to a profitable car business was as simple as employing people to buy your cars, GM and Ford would have workforces in the millions.
02-09-09, 10:19 AM
#10
That's the point though - they are making a loss - there are no "little" profits - especially in discounted sales.
02-09-09, 10:20 AM
#11
Lexus Fanatic
I agree. It's not necessarily that simple. I wasn't trying to illustrate the whole picture.....only one part of it. Still, fewer workers mean fewer sales. And if OTHER companies are laying off, too, as is happening with today's economy, an auto firm can't rely on Laid-Off Joe Blow's neighbor down the street for a sale either.
02-09-09, 10:27 AM
#12
Lexus Fanatic
Another example of the classic, "making it up with volume" approach is the Big 3, with their addiction to fleet/rental car sales, again low profit.
02-09-09, 10:27 AM
#13
Guest
Posts: n/a
I agree. It's not necessarily that simple. I wasn't trying to illustrate the whole picture.....only one part of it. Still, fewer workers mean fewer sales. And if OTHER companies are laying off, too, as is happening with today's economy, an auto firm can't rely on Laid-Off Joe Blow's neighbor down the street for a sale either.
02-09-09, 10:27 AM
#14
I agree. It's not necessarily that simple. I wasn't trying to illustrate the whole picture.....only one part of it. Still, fewer workers mean fewer sales. And if OTHER companies are laying off, too, as is happening with today's economy, an auto firm can't rely on Laid-Off Joe Blow's neighbor down the street for a sale either.
02-09-09, 10:33 AM
#15
Lexus Fanatic
I know what you mean - we become trapped in a cycle of layoffs, reduced consumer confidence, reduced spending, more layoffs etc. etc. It's breaking the vicious cycle that is the difficult thing - and that's where the arguments about economic stimulous packages come in - will they restore some confidence?