NISSAN Motor is eliminating a work shift at two US vehicle assembly plants and trimming its hourly staff via buyouts, a downsizing to align its output with lower sales volumes as it mulls a possible sale to Honda Motor.
The Yokohama-based automaker said on Wednesday (Jan 29) it will move to a single shift from mid-April at one production line in each of the factories, and seek an unspecified number of voluntary buyouts or early retirements.
“We are responding to the needs of the market based on where we are today,” David Johnson, the company’s senior vice-president in charge of US manufacturing and supply chain, said. He declined to say how many fewer cars Nissan expects to produce or the amount of the estimated cost-savings from the reductions.
Nissan has pledged to cut 9,000 jobs globally and reduce production capacity by 20 per cent. The streamlining effort reflects slumping profits and a push to bolster its negotiating position with Honda as the two automakers discuss a capital tie-up.
The cuts impact Nissan’s two best-selling models in the US: the Rogue compact crossover SUV, which is made in Smyrna, Tennessee, and Altima mid-sized sedan built in Canton, Mississippi. The carmaker’s overall US sales volume grew 2.8 per cent last year to 924,008 vehicles, but Altima model deliveries fell 11 per cent and Rogue dropped 9.5 per cent.
Those shrinking volumes have forced the company to halt output up to an extra day every week and extend holidays around Thanksgiving and Christmas. Moving to a single shift is designed to remove that slack and boost capacity. Nissan said it will continue to run a second shift at the other production line in both plants, which make vehicles such as the Pathfinder SUV and Frontier pickup.
The company notified hourly workers at the two plants on Wednesday and plans to communicate the cuts to suppliers within the next 24 hours. “Obviously, whenever you have a shift change like this, there are knock-on effects,” Johnson said. “We have experience in doing this from when we moved from three shifts to two shifts” at the two plants in 2018 and 2019, he said.
Nissan expects to resume two-shift production at both factories when new models are introduced in 2027 and 2028. The carmaker came to the decision last week as part of a broader global restructuring, but Johnson said it did not consider deeper cuts at its US manufacturing operations. “It wasn’t even an option,” he said. BLOOMBERG
