Japan’s automaker Nissan is implementing a global cost-cutting initiative by offering voluntary separation packages to employees at three of its facilities in the US. The buyouts will be available at the vehicle assembly plants in Smyrna, Tennessee, and Canton, Mississippi, as well as an engine plant in Decherd, Tennessee.
As part of the cost-cutting strategy aimed at reducing global costs by $2.6 billion, Nissan will also reduce shifts at these facilities. Starting in April 2025, the Smyrna plant will reduce one of two shifts producing the Rogue sports utility vehicle, followed by a similar shift reduction for the Altima sedan at the Canton plant in September. Nissan also manufactures Rogue vehicles at its Kyushu factory in Japan.
In July 2024, output at the Kyushu facility was reduced by one-third due to decreased demand in the US. At the Decherd plant in Tennessee, which produces engines, shift adjustments will be gradual with some shifts maintained and others reduced by one shift.
While the exact number of US workers expected to accept the buyout offer has not been disclosed by Nissan’s spokesperson, reports suggest that the company could potentially cut up to around 1,500 jobs with this move. The company has stated that there are no plans for involuntary layoffs.
As of the end of 2024, Nissan had over 11,700 employees at the three US plants. In response to a sales downturn in key markets like China and North America, Nissan announced a plan in November to eliminate 9,000 jobs globally and reduce capacity across its 25 vehicle production lines.
Additionally, Nissan and Honda Motor began discussions on a potential merger in December, which could result in the creation of the world’s third-largest auto group with an annual production of 7.4 million vehicles. Last week, Bloomberg reported that Nissan plans to halt production of its AD compact van in November to address excess production capacity.
In conclusion, Nissan’s cost-cutting measures and restructuring efforts reflect the challenges faced by the automotive industry and the ongoing shifts in market demand. The company’s initiatives aim to enhance efficiency and competitiveness in the evolving automotive landscape.
