TOKYO (Reuters) - Nissan Motor Co, Japan’s third-largest carmaker, on Monday forecast its first annual operating loss under the baton of Chief Executive Carlos Ghosn as a rapid downturn in the global car market and a strong yen take their toll.
Ghosn, known as a master cost-cutter, arrived from France’s Renault SA in 1999 to help turn around Nissan, which was on the verge of collapse. Renault, which Ghosn also heads, has a 44 percent stake in Nissan.
Below are the main points Nissan announced at a news conference on its third-quarter results.
— Expects operating loss of 180 billion yen ($2 billion), down from a profit of 270 billion yen forecast in October
— Sees operating loss narrowing to 81 billion yen in the fourth quarter on a slew of cost cuts, from 99 billion yen in the third quarter
— Freezing five-year business plan to expand revenue by an average 5 percent each year until the year to March 2013; forecasts a 23 percent drop this fiscal year, the first year of its current business plan
— Aims to get back to positive cash flow in fiscal year to March 2010
— Has cut estimated global production volume this fiscal year to 3.069 million units, or 20 percent less than it had planned at the beginning of the business year
— To keep all plants worldwide in preparation for demand recovery led by BRICs, the Middle East and eastern Europe
— To launch operations at the Nissan-Renault car plant in Chennai, India, with only one production line instead of two planned originally
— To suspend participation in the Nissan-Renault industrial project near Tangiers, Morocco
— To cut capital spending by 14 percent to 330 billion yen next fiscal year
— To dismiss 20,000 workers to reach total headcount of 215,000 by March 2010, including through natural attrition, contract and temporary staff as well as regular employees participating in existing voluntary early-retirement programs
— To cut salaries of all board members and corporate executives by 10 percent and those of all managers by 5 percent until conditions improve; no bonus for board members this fiscal year
— Talking with unions to introduce work sharing with the possibility of expanding it if business conditions deteriorate
— To slash overtime work in Japan by 75 percent next fiscal year in addition to a 30 percent cut already in place
— To sell non-core assets and businesses
— To omit dividend payment this fiscal year
— To secure funds next fiscal year through own efforts and by asking different governments to help facilitate funding for all car makers; has secured funding for this fiscal year
— Aims to generate 130 billion yen cash in 2009/10 by improving working capital
— Commits to generating 90 billion yen contribution of free cash flow through deeper synergies with Renault
Reporting by Yumiko Nishitani