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Nissan to slash jobs, production after forecasting $2.9 billion loss

Mon, 09 Feb 2009 00:00:00 -0800

Reversing his profit forecast to a loss, Nissan Motor Co. CEO Carlos Ghosn entered crisis mode on Monday.

Ghosn announced plans to slash 20,000 jobs, cut production by 20 percent, scale back model launches and delay new factories. Nissan may 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 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 biggest 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 in Tokyo while announcing fiscal third-quarter results. "Systematically, the worst scenario happened."

By Hans Greimel- Automotive News