Nissan's bleak outlook: revenue down, looming 20 000 job cuts
Brand will its reduce its production facilities from 17 to 10, which could put the future of the Rosslyn Plant outside Pretoria in the firing line.
Nissan has announced that around 15% of its global staff will be cut. Photo by Richard A. Brooks / AFP
Nissan posted an annual net loss of $4.5-billion (R82.2-billion) on Tuesday (13 May) while saying it plans to cut 15% of its global workforce and warning about the possible impact of US tariffs.
The heavily indebted carmaker, whose merger with Honda collapsed this year, is slashing production as part of its expensive business turnaround plan.
'We must prioritise'
'Nissan must prioritise self-improvement with greater urgency and speed,' CEO Ivan Espinosa told reporters.
'The reality is clear. We have a very high cost structure. To complicate matters further, the global market environment is volatile and unpredictable, making planning and investment increasingly challenging.'
Nissan reported a net loss of $4.5-billion for the financial year to March 2025.
Its worst ever full-year net loss was 684-billion yen (R85-billion) in 1999-2000, during a crisis that birthed its partnership with Renault.
ALSO READ: Nissan's woes deepen as more job cuts loom
Renault, which has nearly a 36% stake in Nissan, said Tuesday it expects to take a 2.2-billion euro (R40.2-billion) hit in the first quarter due to Nissan's turnaround plan. Nissan did not issue a net profit forecast for 2025-2026.
'The uncertain nature of US tariff measures makes it difficult for us to rationally estimate our full-year forecast for operating profit and net profit, and therefore we have left those figures unspecified,' Espinosa said.
Nissan's shares closed three percent higher Tuesday after reports, later confirmed by the company, that it planned to slash a total of 20 000 jobs worldwide.
'We wouldn't be doing this if it was not necessary to survive,' Espinosa said of the cuts.
Junk ratings
Nissan, as part of recovery efforts, also said it would 'consolidate its vehicle production plants from 17 to 10 by fiscal year 2027'.
'In China, we will strengthen our market performance by unleashing multiple new-energy vehicles,' it added.
A merger with rival Honda had been seen as a potential lifeline but talks collapsed in February when the latter proposed making Nissan a subsidiary.
Espinosa said Tuesday that Nissan remained 'open to collaborating with multiple partners', including Honda.
The automaker, whose shares have tanked nearly 40% over the past year, appointed Espinosa CEO in March.
Ratings agencies have downgraded the firm to junk, with Moody's citing its 'weak profitability' and 'ageing model portfolio'.
Of Japan's major automakers, Nissan is likely to be the most severely impacted by US President Donald Trump's 25 percent tariff on imported vehicles, Bloomberg Intelligence analyst Tatsuo Yoshida told AFP ahead of Tuesday's earnings report.
Its clientele has historically been more price-sensitive than that of its rivals, he said.
So the company 'can't pass the costs on to consumers to the same extent as Toyota or Honda without suffering a significant loss in sales units', he added.
ALSO READ: Nissan CEO Makoto Uchida officially steps down
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Daily Maverick
2 hours ago
- Daily Maverick
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IOL News
9 hours ago
- IOL News
Auto sector reels from China's rare earth restrictions
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While these rules were expected to be relaxed after a tariff deal in Geneva last month, industry stakeholders said they have not been eased at a sufficient pace. "Since early April, hundreds of export licence applications have been submitted to Chinese authorities, yet only approximately one-quarter appear to have been approved," the European Association of Automotive Suppliers (CLEPA) said Wednesday. "Procedures are opaque and inconsistent across provinces, with some licenses denied on procedural grounds and others requiring disclosure of intellectual property-sensitive information." And US Treasury Secretary Scott Bessent this month said Beijing was "blocking certain products it had agreed to market as part of our agreement". China, however, defended its "common international practice". Few alternatives Rare earths are 17 metals used in a wide variety of everyday and high-tech products, from light bulbs to guided missiles. Two of them - neodymium and dysprosium - are crucial to making powerful magnets for electric vehicles and wind turbines. These components play an essential role in "electric motors, sensors, power steering, and regenerative braking systems, among other advanced features in modern vehicles", according to consultancy firm BMI. China's restrictions highlight the world's heavy dependency, with Europe importing 98% of its rare earth magnets from the country, BMI said. And, it notes, while the European Union has introduced regulations to boost its production of critical minerals, "rare earth processing operations in Europe not only struggle to compete with Chinese producers on cost, but also lack the necessary scale to supply its automotive sector". Industry group CLEPA added that efforts undertaken in Europe to diversify supply sources "offer no short-term solutions and cannot address the acute risks currently facing supply chains". 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IOL News
13 hours ago
- IOL News
Europe's Left Must Unite to Oppose NATO's Rearmament and Austerity
U.S. Secretary of Defence Pete Hegseth (left) and NATO Secretary General Mark Rutte in conversation ahead of the meeting of NATO defence ministers at NATO Headquarters in Brussels, Belgium, on June 5, 2025. Image: AFP John Ross As Europe approaches NATO's 24–26 June summit in The Hague, its 750 million people face a decisive strategic choice that will affect their lives for years to come – and one with a far wider global impact. The policies implemented in Europe in recent years have been disastrous socially, economically, politically, and militarily. Europe is experiencing worsening social conditions, its largest war since 1945 in Ukraine, and the biggest rise of far-right authoritarian, racist, and xenophobic forces since the Nazis in the 1930s. The proposals to the NATO summit would worsen that situation. The key question is therefore whether Europe will continue down this destructive, disastrous path or adopt policies that offer a way out. NATO Secretary-General Mark Rutte has proposed to the 32 NATO members that 'the NATO summit… aim for 3.5% hard military spending by 2032' – a 75% increase from the previous 2.0% GDP target. Trump calls for even higher military expenditure of 5% of GDP. Rutte opened the door to this by supporting a commitment to '1.5% related spending, such as infrastructure, cybersecurity and things like that. Also achievable by 2032'. The 3.5% plus 1.5% adds up to Trump's 5%. The social and political consequences of such a course are already clear. Europe's economies are nearly stagnant, with the EU's annual per capita GDP growth averaging less than 1% from 2007 to 2024. The IMF, somewhat optimistically, projects an increase to only 1.3% by 2030. With rising inequality and reductions in social spending due to austerity policies, hundreds of millions of people in Europe have already experienced stagnant or declining living standards. Diverting more resources into military spending, already being accompanied by social spending cuts to finance it, will worsen that situation further. The political consequences are also clear. Far-right and neo-fascist forces, exploiting the worsening conditions, which are caused by austerity measures and increased military spending, by demagogically blaming immigrants and ethnic and religious minorities, will gain further strength. The disastrous consequences for traditional left-wing and progressive parties supporting or enacting these rearmament and austerity policies, even before their support for the new NATO rearmament policies, are already known in major European countries. The SPD in Germany in 2025 saw its vote drop to 16%, the lowest since 1887. In the last elections at which they stood independently, the French Socialist Party gained only 6%. In Britain, the Labour Party, which already received one of its lowest votes since the 1930s at the last election, is now in the polls behind the far-right Reform Party. In contrast, left-wing parties that have opposed austerity and NATO policies – La France Insoumise in France, Die Linke in Germany, and the Belgian Workers Party – have maintained or significantly increased their support. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ This disastrous collapse suffered by traditional left-wing parties that have supported war and austerity is extremely dangerous in the context of the rise of far-right parties across Europe. The reason for the collapsing support for such parties is obvious. Such policies attack the population's living standards. If parties claiming to be on the left continue to support austerity and rearmament, this trend of decline will just continue. The only way out of this situation for both Europe's population and the left is a complete policy reversal to one that prioritises social progress and economic development. Following the end of the Cold War, Europe should have focused on fostering economic cooperation and minimising military tensions and expenditures. This would have created a balanced economic area, equivalent to the US, with a strong potential for growth by combining Western Europe's manufacturing and services with Russia's energy and raw materials. What was possible was shown in Asia by ASEAN, which, in a continent that had suffered the worst conflicts of the Cold War, the Korean and Vietnam wars, became the world's most rapidly growing economic region through a concentration on economic development and the absence of military blocs. But, because an economically cooperating Europe could have been a successful competitor to the United States, US administrations pursued a path to prevent it – primarily through NATO's eastward expansion, which was carried out in direct violation of US promises to then-Soviet Premier Gorbachev that NATO would not advance 'an inch' eastward after Germany's reunification. Instead, in 1999, 2004, 2009, 2017, and 2020, new countries were added to NATO, and the door was deliberately left open to admitting Ukraine, known to be a red line for Russia due to Ukraine's proximity to Russia and its position as a historical route for invasion. Numerous US experts on Eastern Europe opposed this, led by George Kennan, the original architect of US Cold War strategy, who warned NATO expansion would be 'the most fateful error of American policy in the entire post-Cold War era'. But their warnings were ignored, with results culminating in the Ukraine war. Now NATO demands rearmament and cuts in social protection to finance this war. NATO forces simultaneously expanded outside Europe to participate in wars in the Global South, Afghanistan and Libya, and set up numerous organisations and initiatives to prepare for intervention in the Global South – such as the Istanbul Cooperation Initiative, the Strategic Direction-South HUB, the Liaison Office in Addis Ababa – and has begun to expand into the Pacific – with Japan, Australia, New Zealand, and South Korea attending every NATO summit since 2022. Such NATO expansion would involve Europe in even more conflicts and more calls for military expenditure. What is required is the complete opposite – priority to social progress and investment for economic growth. Both require more spending and are therefore directly contrary to a military build-up. Europe's need for social spending is obvious. But Europe's investment, the key to economic growth, has also collapsed. In the EU, investment, once depreciation (the wearing out of existing means of production) is taken into account, has halved from 7.4% of GDP in 2007 to only 3.5% on the latest data. International comparisons show this is enough only to generate 1% annual economic growth. Additionally, the US is now pressing for further policies harmful to Europe and its people. The US has already enormously damaged Europe by its conscious policy of cutting off Western Europe's source of cheap energy from Russia, achieved via the Ukraine war and the blowing up of the Nord Stream pipeline, which anyone who looks seriously at the matter knows was carried out by the US.
