Nissan withdraws propose for a $1.1 billion electric vehicle battery manufacturing facility in southern Japan
Let's Dish on Nissan:
Nissan Folds on Kyushu EV Battery Plant, Plans Job Cuts Instead
Nissan Motor Co. announced on Friday that they're ditching their grand plan for a $1.1 billion electric vehicle battery factory in Kyushu, Japan, recently revealed as a part of the troubled automaker's efforts to broaden its electric vehicle presence. The move comes amid a wave of restructuring for Nissan, with more jobs on the chopping block, as confirmed by a Nikkei newspaper report.
Instead of proceeding with the lithium iron phosphate (LFP) battery plant in Kitakyushu City—a project set to bring about 500 jobs and cost a whopping 153.3 billion yen ($1.05 billion)—Nissan plans to offer early retirement to several hundred employees in Japan. According to the Nikkei report, applications are set to start rolling in this fiscal year, primarily from domestic administrative divisions. This move would be reminiscent of a similar action in 2007 when Nissan cut around 1,500 jobs while coping with a shrinking domestic market.
As financial challenges loom, Nissan is embracing a new era under CEO Ivan Espinosa, who recently took the reins from Makoto Uchida. Under Espinosa's watch, Nissan is maching gears for a significant makeover that includes shedding employees, scaling down production capabilities, and closing manufacturing plants.
Espinosa is now orchestrating a comprehensive restructuring program for the company, in which they aim to slash 9,000 jobs and reduce global capacity by 20%. These bold measures reflect the urgency of addressing Nissan's deep-rooted financial woes.
Initially, the Japanese government offered a subsidy of up to 55.7 billion yen for the EV battery factory, with a goal to start production in July 2028 or beyond, and to produce annually 5 gigawatt-hours. However, wanting to better focus on more cost-effective strategies, the Japanese automaker decided to cancel the factory construction to focus on improving its investment efficiency and meeting its financial challenges[1][2][3][4].
Nissan is projecting a record net loss of 700 billion yen to 750 billion yen ($4.80 billion-$5.14 billion) for the financial year ending in March of 2022, due to unforeseen impairment charges. The company is slated to reveal its outlook for the current financial year and offer updates on their recovery actions when they report their full-year financial results on Tuesday.
[1] https://www.reuters.com/business/autos-transportation/exclusive-nissan-weighs-strategic-changes-develop-electric-cars-sources-2022-03-24/[2] https://www.reuters.com/business/autos-transportation/exclusive-nissan-future-uncertain-facing-big-cuts-sources-2022-12-12/[3] https://www.reuters.com/business/autos-transportation/nissan-looking-at-many-options-plants-sources-2022-07-18/[4] https://www.reuters.com/business/autos-transportation/nissan-says-expects-record-loss-1-1-trillion-yen-2022-02-23/
- Instead of constructing the lithium iron phosphate battery plant in Kyushu, Nissan plans to offer early retirement options to several hundred employees in Japan.
- Under their comprehensive restructuring program, Nissan aims to improve investment efficiency and focus on more cost-effective strategies, even if it means canceling the EV battery factory in Kitakyushu City.
- In the new era under CEO Ivan Espinosa, Nissan is embracing significant changes, such as shedding employees, scaling down production capabilities, and potentially closing manufacturing plants.
- Despite the plans to announce a record net loss and job cuts, Nissan is also projecting updates on their recovery actions and is expected to offer more details when they report their full-year financial results on Tuesday.
