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Ghosn to Announce New Belt-Tightening

Japanese, following Detroit’s lead by cinching belt, slashing jobs.

by on Feb.05, 2009

Tighten that belt: Nissan CEO Ghosn

Tighten that belt: Nissan CEO Ghosn

Though Japanese makers suffered a smaller decline in January sales than their Big Three rivals, they’re still feeling the impact of the collapsing economy – and struggling to stay ahead of the situation by slashing costs and, as needed, eliminating jobs. It doesn’t help that the Asian makers are undergoing a sales crisis in their home market, as first reported, on Tuesday.

Major cost-cutting is expected to come from across the Japanese industry, with Nissan scheduled to reveal its own moves, as early as next week.

In the U.S., belt-tightening is occurring at every level, from minor steps like delaying orders for new business cards, all the way up to extended plant shutdowns. Toyota is planning a first-ever “voluntary” round of job cuts that could impact 100s, perhaps 1000 or more workers. Meanwhile, Nissan is restructuring sales and marketing field operations, as well as realigning its U.S. design centers. The much-ballyhooed styling center, in Farmington Hills, MI, will be consolidated into another design operation, in California. All told, 110 jobs will be lost, in the process.

Sources tell TheDetroitBureau that more big cuts are coming, at Nissan, though for now, they’re declining to provide many details. The corporate priority, said a well-placed Japanese executive, is to trim unnecessary spending to focus on core activities, especially product development, as well as basic, day-to-day operations.

“We don’t want to have to cut up the furniture into firewood to stay warm,” said the source, admitting that was a bit of an exaggeration, but nonetheless indicative of the watchful approach taken by Nissan’s CEO Carlos Ghosn.

Ghosn, who serves double-duty as chief executive of Nissan’s French alliance partner, Renault, will meet with the Japanese maker’s employees, in Tokyo, on Monday, February 9th, to provide a better sense of the company’s financial situation, and to outline the cost-cutting plan. Details, sources say, will be released at the same time the carmaker announces its third-quarter financial results. (Nissan, like much of Japan’s businesses, operates on a fiscal year calendar, which ends March 31.)