Nissan is in dire trouble and plans to scrap 20,000 jobs and a new battery plant in Japan /Nissan
All alarm bells are going off at Nissan. Japanese media reported that Nissan Motor Co. plans to cut about 20,000 jobs globally as part of a ramped-up restructuring campaign under the new CEO, Ivan Espinosa.
Last week, in an effort to speed reforms and conserve cash, Nissan announced it was canceling plans to build a battery factory for electric vehicles on the southwestern island of Kyushu in Japan. Other plants are also in danger.
Japanese broadcaster NHK and the Nikkei business daily reported that the new plan calls for more than 10,000 personnel cuts and some 9,000 already planned as part of the embattled Japanese carmaker’s revival plan. The cuts will happen in Japan and overseas.
Espinosa, who took over from Makoto Uchida on April 1, is the company’s youngest CEO and is tasked with turbocharging his predecessor’s rescue plan. Last autumn, Uchida launched a turnaround plan that will run through early 2027 after Japan’s No. 3 automaker sank to a net loss in the July-September quarter. The overhaul was Uchida’s third restructuring plan since he took office in December 2019 in the wake of the arrest and ouster of former Chairman Carlos Ghosn.
That plan aims to achieve a cost structure that enables it to achieve profitability even at a global volume of 3.5 million vehicles, about 150,000 more than Nissan sold in 2024. To get there, Nissan is trying to cut global capacity by 20% to bring its global production capacity of 5 million vehicles more in line with its annual sales numbers. It had also already targeted 9,000 jobs for elimination.
Last year, Nissan had over 133,000 employees. The decision to lay off some 20,000 means that approximately 15% of the workforce will leave the company. Nissan is also planning to close a plant in Thailand. According to the new turnaround plan called Re: Nissan, Espinosa presented during the earnings call on May 13th, seven plants will be closed by the end of 2027.
Future at stake?
Nissan has been navigating heavy waters since the planned merger with compatriot Honda failed. It has seen its sales decrease ever since and is now struggling with the eventual backlash of the tariffs/trade war in the car industry. For example, Nissan sold 924,000 cars in the US last year, which is some 30% of its total production.
Almost half of these were imported from Japan, and they will have to pay 25% import taxes in the future. At the moment, Nissan says it has an essential stock of cars at its dealers in the US, but the real dilemma will come sooner or later.
On April 24th, Nissan announced it was expecting a net deficit of 700 to 750 billion yen (€4.6 billion) for the ’24-’25 fiscal year. Yesterday, Nissan confirmed it was 671 billion yen (€4.1 billion). Nissan pointed to the restructuring plan and the re-evaluation of its production activities to explain these significant losses.
The new battery plant in Japan was planned to produce LFP batteries. In September, Nissan received approval to build the new EV battery plant in Japan from the Ministry of Economy, Trade, and Industry (METI). The batteries were set to be installed in Nissan’s mini vehicles starting in 2028, part of an investment of almost €1 billion.
Nissan was scheduled to receive up to €340 million in government support to help build a domestic supply chain. The new LFP plant was expected to help Nissan cut EV battery costs by 20% to 30%, with up to 5 GWh annual production capacity.
Between now and 2027, Nissan wants to consolidate its production plants from 17 to 10 and significantly reduce its future investments.
Ghosn comments
Every time Nissan is in dire trouble, a ‘ghos(n)t’ from the past sticks his head up. Former Nissan CEO Carlos Ghosn isn’t mincing his words when he comments on Nissan’s fate.
The ex-Nissan supremo, tucked away in his Lebanese home after his escape from Japanese custody, still speaks to the press occasionally. Every media appearance is filled with sharp criticisms of his former employer, and his latest interview with French news broadcaster BFM TV is no exception.
The always flamboyant Carlos Ghosn, when he was still at the helm of Nissan /Nissan
As for what went wrong at Nissan, Ghosn lays the blame squarely on its leadership: “Decisions that were too slow,” he said, adding that “most of the problems lie with Nissan’s management.” Known for speaking his mind, the former CEO didn’t hold back: “The company is in a desperate situation” and is “forced to beg for help from one of its main competitors in Japan.” Ghosn is, of course, referring to the failed negotiations with Honda.
Ghosn called the Nissan-Honda merger attempt a “desperate move.” He described the existing alliance with Renault as “small and fragile” and said Nissan has become “boring, mediocre.” In his latest interview, the man claims Nissan is “in the doldrums.”
Espinosa partly answered these allegations yesterday: “Our fixed cost structure is something we cannot absorb with the current revenue.” He blamed Nissan’s growth plan under Carlos Ghosn in 2015 and 2016, which envisaged annual vehicle sales of around 8 million globally for Nissan and Renault. “We are facing the reality of being much smaller than that,” Espinosa said.
What about Nissan Europe?
Company figures showed that Nissan’s European operations lost €599 million in the financial year ending March 31st due to lower vehicle sales and increased incentives. Europe was Nissan’s worst-performing region.
Nissan has cut back operations in Europe in recent years to improve profitability. The automaker shut its plant in Barcelona, Spain, in 2021. To boost its European business, Espinosa said Nissan will continue to utilize its partnership with Renault in Europe and import models developed with its Chinese joint venture with Dongfeng.
Renault’s projects in collaboration with Nissan through the Alliance include the Micra small car, which is based on the Renault 5 and will go on sale this year. Nissan will also sell a version of the Renault Twingo small EV, which is due in 2026. Imported Chinese models are expected to include the Nissan-Dongfeng Frontier Pro plug-in hybrid pickup that would replace the discontinued Navara pickup.
As part of Espinosa’s accelerated cost-cutting drive, Nissan’s UK factory will not be included in the automaker’s plan to close seven plants globally. He said Nissan’s plant in Sunderland, England, will continue as the automaker’s sole manufacturing facility in Europe.
“In Europe, we will strengthen our presence by assembling more electrified models in Sunderland,” Espinosa said as he outlined the new turnaround plan called Re: Nissan during the earnings call on May 13.
The Sunderland plant employs about 6,000 people and builds the Qashqai compact SUV and Juke small SUV, mainly for sale in Europe. Nissan has spent £2 billion upgrading the facility to build the new generation Leaf battery-electric car this year, along with other electric models, including a replacement for the Juke small SUV.
The British government said on May 12th that it had helped secure a 1-billion-pound (€1.19 billion) funding deal that would allow Nissan battery supplier AESC to complete a gigafactory in Sunderland to supply the automaker’s vehicle assembly plant.
In Europe, Nissan plans to launch the new Leaf (in front), the new electric Micra (right), produced and co-developed with Renault, and the successor of the Juke (left), all fully electric. By 2027, they will be joined by another collaboration product with Renault, the Nissan version of the new Twingo EV/Nissan
