Nissan to cut production capacity by 20% after suffering severe net losses

In an interview with CNN Business, Nissan Motor Co. Chief Operating Officer Ashwani Gupta explained the reasons for the company revealing it’s large net losses for the 2019 financial year.

Gupta claimed that Nissan’s biggest mistake had been “Global expansion. To do everything, everywhere”. He said that the main three factors that had contributed most to the company’s 2019 net losses were “excessive fixed costs, the covid-19 virus, and financial impairment”.

He confirmed that there would be closures of two plants, one in Indonesia and one in Barcelona. And that the scope of the Barcelona plant closure would be 3,000 jobs. He counterbalanced however by saying that headcount would increase in other parts of the world including Japan and the United States. Gupta told CNN “we are going to launch 8 new products in next 28months so obviously we need production and we need people”.

Gupta explained that Nissan can’t guarantee long term job security for its 10,000 workers in the U.S, now furloughed during the coronavirus lockdown. However, those workers are beginning to return to their factories “Now we are ramping up the plants, and they are coming back,”. Gupta said he was looking at 93% production utilisation in the United States.

He said that the company would “absolutely not” be closing its UK plant, but explained that “Nissan is going to focus on US, China and Japan. And the rest of the regions which are also important, we will take the strength from Renault and also Mitsubishi.”

He expanded: “US, China, Japan are the top three markets for us in terms of market share. But Europe is very important for us because we are the ones who created the crossover SUV. We are going to focus that in Europe, focusing that in Sunderland. At the moment there is no line closures in Sunderland.

-Credit to CNN-

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