Heard it on PBS on the way to work this am...twenty thousand???!!! Holy smoke, ya'll....THATS a LAYOFF!!

-- Jay Urban (jurban@berenyi.com), October 18, 1999

Answers

Actually, since they are 8 years into a depression with 4.5% unemployment, it's about time some of these loss-making companies started to downsize. Only when the capacity has shrunk back to match the demand will deflation end and their economy start to recover.

-- You Know... (notme@nothere.junk), October 18, 1999.

I hate to say this but I wonder what percentage will, gulp,...

-- Andy (2000EOD@prodigy.net), October 18, 1999.

I'd be interested in the cultural ramifications of this action in Japan. Will Nissan be looked upon as a failing company because it did "downsize"?

Also, where are these 20,000 workers? Here in the US or Japan?

That'll be a significant blow to the unemployment numbers and a strain on the system.

Mike

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-- Michael Taylor (mtdesign3@aol.com), October 18, 1999.

TOKYO, Oct 18 (Reuters) - Nissan Motor Co , sapped by years of disappointing sales and financial losses, announced on Monday it would shut down five factories and cut 21,000 jobs to emerge as a leaner, more competitive company.

Prodded by its major shareholder Renault SA , Nissan said it would close a 37-year-old assembly plant in Tokyo, two components plants and two plants belonging to affiliates as part of an effort to cut costs by one trillion yen ($9.5 billion).

The widely flagged restructuring plan has been viewed as a test case of both Renault's influence with Nissan and the Japanese car industry's willingness to take painful measures to cut capacity after a protracted slide in its domestic market.

``The plan is tough, perhaps even severe, but then our situation is severe,'' Nissan President Yoshikazu Hanawa told a news conference.

Trading in Tokyo had ended by the time of the announcement, but shares in Renault -- which owns 36.8 percent of Nissan -- were down 3.7 percent in Paris on worries about a backlash by Japanese workers to the 14 percent staff reduction to 127,000.

Analysts said the market reaction was unfounded, as the plan would help both Renault and Nissan, which forged an alliance last May to become the world's fourth-largest car grouping.

``At Nissan, everybody's known than the Murayama and Nissan Shatai plants should have been closed but nobody was able to get up and say it,'' said analyst Seiji Sugiura at Nomura Securities.

``He's able to say it and that's a big deal,'' Sugiura said of Carlos Ghosn, the architect of the Nissan plan who is also credited with Renault's recovery after a radical 1996-97 restructuring which included a factory closure in Belgium.

RETURN TO PROFIT SEEN IN FISCAL 2000

Nissan, weakened by depressed Japanese car sales, a lackluster model line-up and lax management, has lost money in six of the past seven years, and its share of the global market has shrunk to 4.9 percent from 6.6 percent in 1991.

Ghosn, former number two at Renault and now chief operating officer at Nissan, said Nissan would take a 200 billion yen provision, resulting in a bigger than forecast loss for 1999/00.

In May the automaker forecast a 60 billion yen loss.

The plan will have a 1.95 billion franc ($323 million) impact on the second-half results of Renault, which said in a statement that it was ``confident in the strength and future of Nissan.''

Ghosn said Nissan aimed to return to profit in fiscal 2000/2001 and generate an operating profit exceeding 4.5 percent of sales in the year to March 2003.

The workforce reductions will be achieved over about three years from attrition, early retirement, spinoffs and an increase in part-time working, Ghosn said.

The plant closures will result in a 30 percent reduction in Renault's production capacity in Japan to 1.65 million vehicles.

NISSAN TO POLISH BRAND IMAGE, CUT BACK SUPPLIERS

Nissan aims to reduce its purchasing costs, which represent 60 percent of the total bill, by 20 percent over the next three years by slashing its parts and materials suppliers to 600 or fewer in 2002 from 1,145 currently, Ghosn said.

It will also reduce its distribution subsidiaries by 20 percent, close 10 percent of retail outlets and sell non-core assets. The auto business accounts for 97 percent of sales but the group also has marine, telecoms and aerospace activities.

Nissan also aims to restore lustre to its brand.

``Our styling has not always been an asset,'' Ghosn said, adding that the company had spent too much energy chasing rivals and not enough on customers, with the result being a huge lineup of models, most of them produced in relatively small numbers.

Nissan will cut its 37-model range in Japan and spruce up its offerings in the United States and Europe.

``The plan is extremely tough. Nissan's margins should recover faster than expected,'' one Paris-based analyst said.

Despite one restructuring effort after another in the past four years, including the closure of its Zama plant in 1995, Nissan remained heavily in debt and continued to chalk up losses when it began looking for a partner.

Under the plan, Nissan aims to cut its net debt to under 700 billion yen by fiscal 2002 from current 1.4 trillion yen.

Major credit rating agency Moody's Investors Service quickly responded to the news by upgrading the rating outlook for the automaker to positive.

($1 equals 105 yen)

<:)=

-- Sysman (y2kboard@yahoo.com), October 18, 1999.

I hope Nissan survives.

-- Paula (chowbabe@pacbell.net), October 18, 1999.

Nissan is not issuing "pink slips." Japan doesn't have "layoffs."

In Japan, the unwritten rule of lifetime employment in large companies means that workers will be offered jobs at other facilities. Some will opt for early retirement if they choose not to move.

Smaller suppliers culled from the list of vendors and secondary reductions in the Nissan global distribution network will be affected more than the Nissan workers.

-- PNG (png@gol.com), October 18, 1999.

whoops! sorry... Should have read:Nissan rearranging human assets....redistributes workers to other sections of economy , where they can be paid by someone else...no pink slips issued!

-- Jay Urban (jurban@berenyi.com), October 19, 1999.

If you only knew how much closer to the awful truth your last post is...

From Japan,

-- PNG (png@gol.com), October 19, 1999.