Trainman Posted February 10, 2009 Share Posted February 10, 2009 Well, not many companies are predciting any profits, I just wonder why Nissan took so long to figure it out? Hans Greimel Automotive News Europe February 9, 2009 10:42 CET UPDATED: Feb. 9, 2009 12:35 CET TOKYO -- Reversing his profit forecast to a loss, Nissan Motor Co. CEO Carlos Ghosn entered crisis mode today. Ghosn announced plans to slash 20,000 jobs, cut production by 20 percent, scale back new model launches and delay new factories. Nissan could also seek government bailout loans, Ghosn said. The 265 billion yen ($2.91 billion) net loss Ghosn now predicts for the fiscal year ending March 31 would be his first loss since taking the charge of Nissan in 1999. The outlook wipes out an earlier forecast for net income of $1.76 billion. Ghosn has put on hold the Nissan GT 2012 mid-term business plan announced last year and its target of achieving 5 percent revenue growth through 2012. That plan was introduced after the earlier Value-Up initiative missed its unit sales goal. The top priority now is preserving cash as Nissan and Japanese rivals struggle against collapsing global demand, a surging yen and shrinking access to credit. Of Japan's six big automakers, only Honda Motor Co. and Suzuki Motor Corp. are still predicting profits. "Nissan is operating in an environment in which we are hit with three challenges at one time, the credit crisis, economic recession and strengthening yen," Ghosn said here Feb. 9, while announcing fiscal third-quarter results. "Systematically, the worst scenario happened." New recovery plan Ghosn's new recovery actions include: • Slashing global workforce to 215,000 from 235,000 by end of 2009. • Cutting labor costs by 20 percent to $7.69 billion. • Limiting launches to 48 new products in next five years, instead of 60 as planned. • Slowing the ramp-up of Nissan's new factory in Chennai, India. • Suspending Nissan's involvement in a new Renault factory in Tangiers, Morocco. • Reducing board member pay by 10 percent, managerial pay by 5 percent. Nissan will also approach governments worldwide about possible credit lines, Ghosn said. He applauded industry support measures already implemented in Europe and being considered in Japan and the United States. "We need access to financing, that's all we're asking," he said. "Cash is king," Ghosn said. "You need to generate cash and be extremely rigorous with cash." The company may seek up to $549.5 million in low interest loans from the Japan's government-backed Development Bank of Japan, the Nikkei newspaper reported. It may also try tapping the $25 billion the U.S. government has earmarked to help automakers and suppliers retool factories to make more fuel-efficient vehicles. Grim outlook For the full-year, Nissan expects an operating loss of $1.98 billion. That's against an earlier outlook for operating profit of $2.97 billion. The company will rein in capital expenditure by 21 percent in the current fiscal year and then cut again by 14 percent next year. The cuts will help Nissan save cash, Ghosn said. That will bring Nissan's spending on capital investment to $3.63 billion in the next fiscal year, from $5.37 billion in 2007. Ghosn warned that global volume will shrink as low as 50 million units in 2009, from an estimated 62 million last year. To match it, Nissan is aiming to cut production by 787,000 units by the end of March - a 20 percent decrease from its planned volume. The 20,000 job cuts account for roughly 8.5 percent of the company's workforce. They include some 2,000 temporary jobs that have already been cut in Japan and another 1,200 early retirement buyouts from the United States. Nissan has also already announced 1,680 cuts in Spain. Nissan did not give details about where the additional cuts will hit. Link to comment Share on other sites More sharing options...
HankG Posted February 10, 2009 Share Posted February 10, 2009 • Reducing board member pay by 10 percent, managerial pay by 5 percent. Although I guess a 10% cut in pay is better than the 20,000 getting laid off, especially since it's not like they'll be hurting for cash, it's still good to see. I just wish my college would do something similar. Cutting out lots of classes, raising tuition, and paying lower scale teachers less while all the higher ups aren't being touched or are even getting paid more. I especially hate that our worthless president who has made countless bad decisions and has gotten the school into a decent bit of trouble got a 10% raise not long ago, so he's now making almost $300,000 a year to do nothing but sit in his office and fskc up. Link to comment Share on other sites More sharing options...
Indigent Posted February 13, 2009 Share Posted February 13, 2009 This notion of executives getting paid vast sums of money to "do nothing but sit and fskc up" is getting tired. I agree that most of those execs make more than they probably should, but you walk a fine line between socialism and reality when you feel disenfranchised by it. These execs have worked hard to get where they are. Whether you feel they deserve to be there or not. There are sooo many things that are involved with positions at that level. They applied themselves and strove to get to the level they are. When it comes down to it, *someone* has to be in that position. If one feels that they could do a better job, I applaud you and wish you the best of luck in your endeavor to achieve that level of success. You just may come to the realization that actual real decision making as a profession is quite difficult. One of the things that makes it difficult is the fact that you will never be able to make everyone happy. Playing the blame game is dangerous. Link to comment Share on other sites More sharing options...
HankG Posted February 13, 2009 Share Posted February 13, 2009 (edited) Just nvm; there's no point. Edited February 13, 2009 by HankG Link to comment Share on other sites More sharing options...
tekazgtr1984 Posted February 14, 2009 Share Posted February 14, 2009 (edited) As if this was all unexpected? Nissan wouldn't be an exception to what's taking place in the automotive industry. I like what Ghosn's done since taking over the Sunny Badge so kudos to him. Nevertheless, with current economic conditions the world over, no automaker is safe. Edited February 14, 2009 by tekazgtr1984 Link to comment Share on other sites More sharing options...
Precise1 Posted February 14, 2009 Share Posted February 14, 2009 /\x2 B Link to comment Share on other sites More sharing options...
kmgar99 Posted February 14, 2009 Share Posted February 14, 2009 This notion of executives getting paid vast sums of money to "do nothing but sit and fskc up" is getting tired. I agree that most of those execs make more than they probably should, but you walk a fine line between socialism and reality when you feel disenfranchised by it. These execs have worked hard to get where they are. Whether you feel they deserve to be there or not. There are sooo many things that are involved with positions at that level. They applied themselves and strove to get to the level they are. When it comes down to it, *someone* has to be in that position. If one feels that they could do a better job, I applaud you and wish you the best of luck in your endeavor to achieve that level of success. You just may come to the realization that actual real decision making as a profession is quite difficult. One of the things that makes it difficult is the fact that you will never be able to make everyone happy. Playing the blame game is dangerous. I agree....the fact the the majority of Executives (CEO's, CFO's etc..) are contract employees is not their fault. The companies that hire them signed the contract to promise them X dollars wether they help turn a profit or not. So getting mad at an individual for walking away from a dying company with millions is all part of our capitalistic society. When everyone's making money and enjoying themselves, no one cares, when S*^T hits the fan, everyone blams these people. No easy way out of this one, and no single point of origin. The stars were ligned up perfectly for this to happen, but hindsight is always 20/20! Link to comment Share on other sites More sharing options...
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