Nissan to slash 20,000 jobs

By Chang-Ran Kim, Asia autos correspondent

TOKYO (Reuters) - Nissan Motor Co said it would cut 20,000 jobs and joined a growing list of automakers warning of red ink this year in what would mark its first loss since Chief Executive Carlos Ghosn took the reins a decade ago.

The spreading global recession has put consumers off buying expensive goods and even if they wanted to purchase a car, financing has become difficult due to a dearth of credit.

Saddled with excess capacity and headcount and with sales plummeting in developed markets, Japan's No.3 automaker has already taken a number of steps to cut production and staff, including through 1,200 voluntary buyouts in the United States.

With these and other measures, including reducing 12,000 jobs in Japan mostly through natural attrition, Nissan said it would reduce groupwide headcount by a total 20,000 by the end of March 2010, equivalent to 8.5 percent of the workforce.

Nissan, 44 percent-owned by Renault SA, now expects an operating loss -- its first in 14 years -- of 180 billion yen ($2 billion) for the year to March 31, instead of the 270 billion yen profit it projected three months ago. Consensus forecasts from 19 analysts had put the loss at 70 billion yen.

Nissan expects its net loss at 265 billion yen instead of a 160 billion yen profit.

"Earnings are going to be bad at automakers for some time," said Tomomi Yamashita, senior fund manager at Shinkin Asset Management.

"You've got the currency problem and the amount of production adjustment that's ahead," he said, adding that automakers could be in the red for a few more quarters.

Last week, Toyota Motor Corp tripled its annual operating loss forecast citing a faster-than-expected sales slump in the main U.S., Japanese and European markets.

Honda Motor Co also cut its forecast last month, but expects to stay in the black.

In the year to March 31, Nissan said it would produce 3,069,000 vehicles, or 20 percent less than it had planned at the start of the business year. It expects sales of 3,382,000 vehicles in 2008/09, down 10.3 percent from last year.

For the October-December third quarter, Nissan made an operating loss of 99.2 billion yen and a net loss of 83.2 billion yen. A year ago, it made an operating profit of 211.9 billion yen and net profit of 132.2 billion yen.

Third-quarter revenue fell about a third to 1.8 trillion yen.

COUNTER-MEASURES

With the triple blow of a credit crisis, recession and a strong yen making life tough for Japanese automakers, Nissan outlined steps to save cash and focus on a healthy balance sheet.