Nissan to shut historic Oppama plant in 2028 as industry shifts reshape Japan's auto sector
's Oppama factory, opened in 1961, was once a crown jewel in Japan's postwar rise to manufacturing powerhouse.
Today, it represents the dangers of being caught flatfooted in a rapidly changing industry.
The factory, about 30 miles south of Tokyo, is set to shut by March 2028 - part of Nissan's wide-ranging restructuring after a slump in sales sparked its worst financial crisis since
Renault SA
rescued the carmaker from near bankruptcy a quarter century ago.
Once synonymous with cutting-edge technology, Japan's legacy brands are struggling to adapt to changing consumer tastes, ceding market share to the likes of Tesla Inc. and a wave of Chinese upstarts led by BYD Co. That means whatever happens to Oppama - and the thousands of local residents that depend on it - will serve as a warning for Japanese manufacturers as intensifying competition sparks a painful period of consolidation that could pave the way for much-needed rejuvenation.
It's also a new era for the Japanese economy, as a wave of bankruptcies among small and medium-sized firms across industries from transportation to technology challenges the idea of 'shushin koyo' - a job for life.
Like any factory town, Nissan's ties run deep. It directly employs almost 10% of Oppama's 29,700 residents. Field trips to the plant are a rite of passage for local school children and the company revived its baseball team this year after a 16-year hiatus, though they lost in the semifinals to ultimate tournament winner Toshiba Corp.
A victory would have provided a welcome distraction, said Yuji Fujita, the third-generation owner of a fresh produce store located in the shopping avenue that runs between Oppama's train station and the factory. He drew parallels with the shutdown of Nissan's Zama plant in 1995, which marked the first factory closure in Japan by any carmaker in the postwar period.
"This is the worst case scenario," said Fujita, whose family has owned around two dozen Nissan cars over the years. "It's impossible to know what will happen to us now."
His sentiment is echoed around town. It's not clear yet how many of the 2,400 people employed at Oppama will be transferred to a Nissan factory in Kyushu, about 600 miles to the southwest, or when they will start their new roles. "The priority now is to figure out what options will be offered to existing employees," said Keiichi Asakura, general secretary of the Nissan Motor Worker's Union.
There's also uncertainty about what happens to the site that spans 1.7 million square metres (18 million square feet) - about half the size of Central Park.
Speculation has swirled among residents that it could be turned into a vacation resort or a theme park, or even used by the private defense industry. Nikkei reported in early July, before the announcement that Oppama will close, that Nissan is in talks with Taiwan's Hon Hai Precision Industry Co. - better known as Foxconn - over the site.
Nissan chief executive officer Ivan Espinosa has said he isn't considering contract manufacturing. And plans are complicated by the need to rewrite the town's civil laws to reflect a change in utilisation.
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