Iconic carmaker thrown £1BILLION lifeline after axing 20k staff as fears grow over future of UK's biggest motor factory
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AN ICONIC carmaker has been thrown a £1billion lifeline from the UK Government.
The struggling car maker had announced plans to axe over 20,000 members of staff due to soaring production costs and disappointing sales.
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An iconic carmaker is on an urgent mission to save £5 billion
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Over 20,000 jobs could be cut as part of the brand's bid to save cash
Credit: AFP
Nissan is looking to raise £5.2billion to stay afloat, with UK Export Finance underwriting a £1billion loan - which will support the beleaguered company.
The manufacturer is planning to cut its number of factories from 17 down to 10.
This has prompted fears that the brand's Sunderland factory could be under threat.
While Nissan has not confirmed the fate of its only UK factory, its CEO Ivan Espinosa has insisted that more electric cars will be produced there.
It is hoped that the £1billion loan from Nissan's lenders, underwritten by The Government, will protect the site.
The huge cash injection is just a fifth of the 1Trillion Yen needed by the company to survive.
It will also look to issue as much as 630billion yen in convertible securities and bonds, including high-yield and euro notes.
Reportedly, the firm is looking to sell-and-lease-back its Yokohama headquarters alongside several properties in the United States.
The Yokohama site is valued at £500 million and was first opened in 2009.
It has 22 floors and a glitzy gallery, along with thousands of workers who use the site every day.
Japanese giant unveils its new bargain EV with quirky 'bug eye' headlights
Finally, the struggling car manufacturer is eyeing a sale of its stakes in Renault and battery maker AESC Group.
Mr Espinosa has commented in the past on Nissan's urgent cost-cutting mission.
He said: 'In the face of challenging full-year 2024 performance and rising variable costs compounded by an uncertain environment, we must prioritise self-improvement with greater urgency and speed, aiming for profitability that relies less on volume."
He added: 'As new management, we are taking a prudent approach to reassess our targets and actively seek every possible opportunity to implement and ensure a robust recovery.'
Development on some Nissan models has been paused, whilst the company tries to balance its books.
Work on all 'advanced and post-FY26 product activities' has been paused, though Nissan has not confirmed which particular vehicles will face suspension.
Mr Espinosa has previously issued a full statement about Nissan's financial woes.
He said: "This is not something that happened in the last couple of years.
"It's more of a fundamental problem that probably started back in 2015, when management thought this company could reach [annual global vehicle sales] of around eight million.
"There were heavy investments both in terms of planned capacity as well as in human resources, but the reality today is we are running at around half that volume. And nobody did anything to fix that until now.'
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