Nissan to Stop Making Cars at One of Its Japanese Plants

In a fresh sign of the troubles afflicting Japanese industry, loss-plagued Nissan Motor Co. said Tuesday that it will shut down auto production at one of its major domestic plants.

Taking a page from corporate America’s recent efforts at cost-cutting, Nissan, Japan’s second-largest auto maker, said the move is part of a restructuring effort aimed at regaining profitability without increased sales. That is a novel goal for a Japanese company since firms here have been obsessed with growth in sales and market share.

Unlike U.S. companies, however, Nissan will not lay off any workers. Bound by Japan’s traditional “lifetime employment” system, Nissan plans to transfer workers from the closed plant to other jobs, according to company spokesman Toshiaki Yasuda.

The company also said it plans to reduce its work force by 5,000 to 48,000 by 1996, a higher number of job cuts than previously announced. Nissan expects to achieve that goal through attrition, with fewer recruits replacing people who retire or leave the company.

The announcement that Nissan plans to stop making cars at its Zama plant southwest of Tokyo, which accounts for about 10% of the company’s car production, is striking evidence of the severity of the Japanese recession. The closure of a vehicle assembly operation is very unusual in Japan.

Nissan said its expected pretax losses have roughly doubled from previous estimates, to about $247 million, for the 12 months ending March 31.

The company plans to continue operating some other facilities in Zama, such as an electronic components factory.

The development underscores how Japanese auto makers are being forced to lower their horizons and squeeze their operations amid the worst slump Japan has suffered in two decades.