DETROIT (Reuters) - Nissan Motor Co said on Wednesday that it would offer buyouts of up to $125,000 to workers at two plants in Tennessee to cut costs as the company reduces truck production in response to a sales slump.
The program is being offered to technicians and salaried workers at its vehicle assembly plant in Smyrna and a powertrain assembly plant in Decherd and will span three years, Nissan said in a statement.
Nissan has 5,500 hourly and salaried employees at the Smyrna plant, where it is eliminating night shift truck production effective August 11. The company has about 1,100 hourly and salaried employees at the Decherd plant.
A spokeswoman said the company expected to eliminate about 1,200 positions with the buyout. In a similar program in Tennessee last year, 775 workers took the package. The company declined to disclose the estimated cost of the program.
Automakers have seen U.S. auto sales drop 10 percent overall in the first half of 2008 under U.S. economic uncertainty and a rise in fuel prices that has landed hardest on large trucks and SUVs.
“The marketplace is changing and Nissan’s North American manufacturing operations must change with it to remain competitive,” said Bill Krueger, senior vice president for manufacturing, purchasing, supply chain management and total customer satisfaction in the Americas.
Nissan is providing lump sum payments of $100,000 to $125,000 depending on length of service, plus medical and car purchase benefits to workers who take buyouts in fiscal 2008. Employees have until September 12 to accept a buyout in 2008.
Benefits will be reduced for buyouts in the fiscal years 2009 and 2010, it said.
The buyout plan does not affect workers at Nissan’s manufacturing plant in Canton, Mississippi, it said. Nissan earlier said it would reduce truck production and increase production of the Altima sedan in Canton in response to the shift in consumer demand toward cars.
Reporting by Kevin Krolicki and David Bailey in Detroit and Chang-Ran Kim in Tokyo; Editing by Gerald E. McCormick, Dave Zimmerman
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