Nissan Layoff 20,000!!

Posted by Kris | Monday, February 09, 2009 | | 0 comments »

Feb. 9 (Bloomberg) -- Nissan Motor Co., Japan’s third- largest automaker, said it will cut 20,000 jobs and post its first loss in nine years as the global recession cripples car demand and a stronger yen ravages the value of overseas earnings.

Nissan expects a net loss of 265 billion yen ($2.91 billion) for the year ending March 31, compared with its October estimate of 160 billion yen in net income. It also scrapped its second-half dividend.

The company’s January sales in the U.S., its biggest market, plunged 31 percent as demand for Altima sedans and Xterra sport- utility vehicles dried up. Chief Executive Officer Carlos Ghosn’s elimination of 9 percent of the workforce caps an earnings season in which all of Japan’s carmakers slashed forecasts and Sony Corp, Panasonic Corp. and NEC Corp. all cut workers.

“The economic storm is wreaking havoc on everyone,” said Yuuki Sakuraigeneral manager of financial and investment planning in Tokyo at Fukoku Mutual Life Insurance Co., which manages the equivalent of $54 billion in assets. “Things could get even worse.”

Car sales in the U.S. have sunk to the lowest level since the early 1980s amid the highest unemployment since 1992, forcing General Motors Corp. and Chrysler LLC to seek government aid. Industrywide sales in Japan fell the most in 35 years last month. The country is headed for its worst postwar recession as factory output slumped an unprecedented 9.6 percent in December and unemployment surged.

“Worst Assumptions”

“Our worst assumptions on the state of the global economy have been met or exceeded,” said Ghosn. Declining consumer confidence and lack of access to credit are “the most damaging factors,” he said.

Toyota Motor Corp., the world’s largest automaker, last week said its loss will be three times earlier estimates. Honda Motor Co., Japan’s second-largest carmaker, slashed its full- year net income forecast 57 percent 80 billion yen on Jan. 30, compared with a previous estimate of 185 billion yen. Mazda Motor Corp.Mitsubishi Motors Corp. and Fuji Heavy Industries Ltd. have also forecast full-year losses.

“The industry has a lot of capacity and demand is very weak, so they have to cut back,” said Yoji Takeda, who manages about $1 billion at RBC Investment (Asia) Ltd. in Hong Kong.

Government Aid

Ghosn has called for government aid for carmakers. The company may apply to Japan’s government for low-interest loans as sales in its home market collapse.

Nissan, 44.3 percent owned by Renault SA, posted a net loss of 83.2 billion yen for the three months ended December. The company was expected to lose 129 billion yen in the third quarter, according to the median estimate of three analysts surveyed by Bloomberg. Sales totaled 1.82 yen.

The company based its earnings forecast on exchange rates of 99.7 to the dollar and 141.9 to the euro. The stronger Japanese currency will cut full-year operating profit by 60.9 billion yen. The carmaker expects an operating loss of 180 billion yen for this fiscal year.

The yen gained 17 percent against the dollar and 18 percent jump against the euro in the last quarter

Nissan fell 5.8 percent to 261 yen at the close of trading in Tokyo before the earnings announcement.

The company is cutting Japan production by an additional 64,000 vehicles in February and March, it said Jan. 15. With the reduction, Nissan’s domestic production will total about 1.1 million vehicles for the year ending March 31, down 289,000 units, or 21 percent from its original plan in May.

In the U.S., Nissan is operating auto-assembly plants on a four-day workweek indefinitely and plans to eliminate about 110 jobs as it adjusts regional sales, marketing and design operations.

Last week, Toyota said its operating loss in the year ending March, its first in 71 years, will likely total 450 billion yen. The Toyota City, Japan-based company’s previously estimated a 150 billion yen shortfall.