Manufacturing AUTOMATION

Nissan to close Indonesia, Spain auto plants after losses

May 28, 2020
By Yuri Kageyama, The Associated Press

TOKYO – Japanese automaker Nissan plans to close auto plants in Spain and Indonesia after sinking into the red for the first time in 11 years as the pandemic squashed global demand and disrupted production.

Yokohama-based Nissan’s chief executive, Makoto Uchida, said Thursday that its European production will be centred at its British plant in Sunderland.

Manufacturing now based in Indonesia will move to Thailand, as the Japanese automaker cuts global production by 20 per cent.

Nissan Motor Co. reported a $6.2 billion loss for the fiscal year that ended in March, its first annual loss since 2009, in the aftermath of the global financial crisis.


The company reported a 319.1 billion yen profit in the fiscal year that ended in March.

It said its global vehicle production dropped 62 per cent in April from a year earlier to 150,388 vehicles. Global vehicle sales slipped nearly 42 per cent last month.

Nissan’s sales for the fiscal year that ended in March sank nearly 15 per cent, to 9.9 trillion yen ($91.6 billion).

“The future remains unclear and it is extremely hard to predict,” said Uchida, who did give a financial projection for the current fiscal year.

But Uchida said Nissan has secured needed financing and is cutting costs and reshaping its operations to restore profitability.

The automaker, creator of the Leaf electric car, X-Trail sport utility vehicle and Infiniti luxury models, intends to build on its core strengths, Uchida said.

It is reducing the number of its models and focusing on certain geographic areas, such as Japan, China and the U.S., to enhance its efficiency and profitability, rather than chasing sales size.

“We will admit our errors of the past and steer into the future in the correct way, without hesitation,” Uchida said.

Earlier Thursday, Spain’s government urged Nissan to reconsider its plan to close manufacturing in the northeastern Catalonia region, saying it would result in the direct loss of some 3,000 jobs.

Workers’ unions have warned 20,000 more jobs in Nissan’s supply chain in Spain are also at risk if Nissan closes its factory in Barcelona and two smaller ones in nearby towns.

On Wednesday, Nissan’s alliance partners Renault of France and Japan’s Mitsubishi Motors Corp. announced plans to share purchasing, development and technology to slash costs and improve their competitiveness.

Nissan has spent much of the past year seeking to recover from the November 2018 arrest of its former chairman, Carlos Ghosn, over financial misconduct allegations, including under-reporting future compensation and misusing Nissan money.

The company’s management appeared to be in disarray after the sudden departure of Ghosn, who was sent by Renault to help Nissan recover from near-bankruptcy in 1999.

Ghosn’s successor, Hiroto Saikawa, also ended up resigning amid allegations about dubious income.

Ghosn says he is innocent. He fled to Lebanon late last year, skipping bail while awaiting trial. Ghosn said he escaped because he believed he would not get a fair trial in Japan.

News from © The Canadian Press Enterprises 2020

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