Nissan to Cut U.S., Canada Payroll

Gardena-based Nissan North America Inc. said Tuesday that it will slash 1,000 jobs from its combined U.S. and Canadian payroll in the next 16 months as it moves to meet corporate chief Carlos Ghosn’s goal of returning the Japanese auto maker to profitability in the next fiscal year.

The North American reorganization, though much less drastic than the sweeping cuts that Ghosn recently announced for the Asian and European operations of parent Nissan Motor Co., will include closure of two regional offices. One is the 44-employee Southwest office in Costa Mesa, which will be relocated to U.S. corporate headquarters in Gardena.

Although Tuesday’s announcement dealt with organizational changes, a big part of the U.S. revitalization is centered on new products. Ghosn, chief operating officer of the No. 2 Japanese auto maker, told Nissan North America employees in a speech last month that the company will spend an additional $700 million on product development in the next three years.

One such product, some insiders say, will be a full-size pickup truck, a vehicle never before offered by Nissan, which introduced the compact pickup to the North American market in 1959.

“Everything else is irrelevant if Nissan North America doesn’t have the power to get products made that appeal to people in the U.S.,” said Wes Brown, an automotive industry analyst with Nextrend in Thousand Oaks.

Ghosn said the auto maker will close four plants in Japan, cutting its production capacity by 25%, and eliminate 21,000 jobs, or 14% of its worldwide work force, by 2003.

Nissan is controlled by France’s Renault, which rescued the ailing Japanese company with a $5-billion investment earlier this year and installed Ghosn to engineer a turnaround.

Renault has said it expects Nissan to turn a profit by the fiscal year ending March 31, 2001. Nissan has lost money in seven of the last eight years and on Sept. 30 posted a $3-billion loss for the first six months of its current fiscal year.

U.S. sales of the company’s Nissan and Infiniti brands are up 8.7% this year on the strength of several new products, including the Xterra sport-utility vehicle, the Frontier Crew Cab four-door compact pickup and the redesigned 2000 Maxima and Infiniti I30 sedans. A new Sentra compact sedan is due in March.

But the company still “must operate more efficiently in North America to remain globally competitive,” said Nobuo Araki, president and chief executive of Nissan North America.

The U.S. and Canadian job cuts and restructuring will help the company “gain additional marketing and production efficiencies” without hurting service to retailers or consumers, Araki said.

The job cuts, he added, will affect all levels of the company and “will be achieved through consolidation, attrition and layoffs as necessary.”