Production is cut at Nissan's north plant

Oct 21 2008 by Karen Dent, The Journal

NISSAN is cutting production at its Wearside factory and introducing short- time working as it tries to reduce the number of vehicles being supplied to the struggling car market.

The Japanese car giant, which employs more than 5,000 people at its Washington plant, said the changes would affect 800 staff on the number two line making Micras and Notes. A number of temporary workers will lose their jobs at the end of their contracts, but Nissan could not confirm how many.

“We have adjusted production for the remainder of the year. This will be very short term,” said Trevor Mann, Nissan Europe’s senior vice president for manufacturing. There will be a small number of temporary contracts that we will release.

“Nobody knows what the market is going to be like in the short term. We pride ourselves as being quite agile and reactive to the market. The industry had a bad September, so we are reacting to that.”

There will be two weeks of non-production and three weeks of short-time working on the Micra and Note line between now and next month. Staff will continue to be paid as normal and training will replace car making on non-production days.

It is businesses as usual on the number one line, which manufactures the Qashqai. A third shift, introduced earlier this year to work on this model, will continue as normal.

Nissan’s relatively strong sales and efficient operations have meant it has escaped much of the slump which has led manufacturers like Ford and General Motors to slash thousands of jobs.

Prof Garel Rhys, director of the Centre for Automotive Industry Research at Cardiff Business School, said: “The car market in the UK has almost fallen off a cliff.

“It really is the survival of the fittest. At Nissan to balance supply with the likely level of demand, they don’t want to build up too much stock in case they have to get rid of it at a discount.

“They really have to make supply match the much lower level of demand.”

The company’s attempts to cut the number of unsold new cars on the market is also affecting its Barcelona factory where two production lines are to be shut down for a week and put on short time for eight. Earlier this month the Spanish plant cut staff numbers by around 1,680.

The Spanish factory has been particularly hard hit by the economic slowdown, high fuel prices and pressure to reduce emissions because it produces 4x4s and vans.

Nissan’s European sales fell by 5.5% year-on-year in September. In the UK, sales were down by more than a quarter compared to the previous year. However, Nissan shifted 490,193 vehicles between January and September, up 16% on the previous year.

“Nissan is still performing very well in a declining market and our market share is growing in Europe,” said Mr Mann.

“We are still on target for another record production year. Last year we made around 370,000 vehicles and even with this downturn, we think we will still do better than that.”

Carlos Ghosn, Renault-Nissan chief executive has already predicted a “prolonged and strong recession” and as early as the Paris Motor Show in the spring, he spoke openly about how difficult it was to restore confidence in the automotive market during the current economic climate.

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Industry hit

THE global economic slowdown is hitting the automotive industry hard.

In addition to around 1,680 Nissan jobs being shed in Spain, Volvo is axing 2,700 posts in Sweden and 600 abroad, while General Motors’ German subsidiary Opel recently shut two plants on a temporary basis and Ford recently announced more than 400 job losses in Australia.

In the US, negotiations are afoot for a potential merger between GM and Chrysler, and Ford may also be involved in this mega-merger.

Nissan Sunderland has always been considered a strong player in the global market. It has repeatedly broken production records and earlier this year, created 850 jobs with the start of a third shift to produce the Qashqai.