Nissan cuts 11,000 jobs and closes seven factories
Virtual and Tom Espiner

BBC News Business Reporter

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Japanese automaker Nissan said it would cut another 11,000 jobs worldwide and close seven factories in the face of weak sales.

China's sales fell, with sales in its two largest markets causing huge losses to revenue, while the proposed merger with Honda and Mitsubishi collapsed in February.

The latest cuts have brought the company's total number of layoffs announced over the past year to about 20,000, or 15% of its workforce.

It is unclear where the layoffs will be made or whether Nissan's Sunderland plant will be affected.

The government said the plant was "critical" to northeast England and it would "closely contact" with Nissan's restructuring plans.

Nissan has about 133,500 employees worldwide and about 6,000 workers in Sunderland.

The company's CEO Ivan Espinosa said two-thirds of the latest layoffs will come from manufacturing, while the rest will come from sales, administrative positions, research and contract personnel.

The latest layoffs are the first of 9,000 job layoffs announced by Nissan in November, part of a cost-saving effort that it says will reduce global output by the fifth.

Negotiations between Nissan and larger rival Honda collapsed in February after the company failed to reach a consensus on a multi-billion dollar partnership.

The plan is to combine businesses to fight competition from rival companies, especially in China.

The merger will create a $60 billion (£46 billion) auto industry giant, the fourth largest car sales in the world, surpassing Toyota, Volkswagen and Hyundai.

After the negotiations failed, then-director Makoto Uchida was replaced by Espinosa.

Nissan also reported annual losses of 670 billion yen ($4.5 billion; £3.4 billion) and tariffs from U.S. President Donald Trump put further pressure on the struggling company.

Mr Espinosa said the last fiscal year had been “challenging” with rising costs and an “uncertain environment”, adding that the result was “wake up calls.”

The auto giant has not made a forecast for revenue for the coming year due to the “uncertainty nature of U.S. tariff measures.”

It said it expects profits to remain flat this year even if the impact of the tariff is not taken into account.

Last week, Nissan announced it had canceled plans to build battery and electric vehicle factories in Japan because it could reduce investment.

The company is having trouble in key markets, including growing competition in China that has led to price declines.

In China, many foreign automakers have been struggling to compete with local companies such as Byd.

China has become the world's largest producer of electric vehicles, and some established automakers have failed to anticipate demand for new technologies.

In the United States, Nissan, another major market for inflation and higher interest rates, sold new vehicle sales, although Nissan retail sales rose slightly last year.

But sales in China fell 12%, and in Japan and Europe, too.