By on April 21, 2020

Nissan said Tuesday that it plans to temporarily shut down its global headquarters and several factories in Japan to help curtail the spread of the novel coronavirus. While Japanese automakers are legally allowed to operate within the country (with conditions), most have instituted some amount of health countermeasures independently. The nation has also formed a joint council for automakers and component suppliers to work with the government in maintaining supply chains while avoiding future contagion risks.

Despite the level of precautions taken, the country’s automakers are still estimated to lose at least $1.6 billion as the pandemic suppresses demand around the world. Nissan, which issued profit warnings in 2019, went into 2020 expecting to eliminate thousands of positions so it could begin amassing $4.4 billion in savings by 2023. Marketing budgets and product lineups would also need to be rejiggered dramatically to assure profitability moving forward. With the coronavirus further complicating the company’s strategy, May’s idling could be about more than just containing the coronavirus. 

Most Japanese automakers, including Nissan, have already stalled production due to supply chain issues and an overwhelming lack of customers. According to Reuters, Nissan said that 15,000 employees at its headquarters in Yokohama and main R&D center in the nearby Atsugi, Kanagawa Prefecture would be required to take leave for 16 days from next Monday through Japan’s “Golden Week” holiday — starting on May 4th.

From Reuters:

Its headquarters would be closed to all but essential workers, a Nissan spokeswoman said, adding that those affected would receive “the majority” of their full salaries during the period.

The spokeswoman said the measures were aimed at keeping more than 90 percent of its employees away from its offices, up from 80 percent at the moment.

Like many of its global rivals, Nissan has also shuttered most of its global production facilities in compliance with “shelter at home” directives to contain the spread of the virus.

Admirable. But Nissan is also expected to make huge production cuts in the years ahead — becoming a smaller, more stable company. That’s the hope, anyway. Analysts were predicting annual targets being cut by as much as 1 million units before the pandemic. The manufacturer is expected to released a revised plan (one that accounts for the coronavirus) next month, with most under the impression that intensified downsizing will be necessary. Nissan’s not alone in this, however. Rivals in better financial health have said they’re expecting 2020 production levels to be off target by as much as 50 percent.

By idling its headquarters, the automaker can probably save itself a bit of money as it also helps enact some useful social distancing measures. Still, it’s hardly an ideal scenario for the company. Many of non-essential workers will continue drawing from funds that can’t be replenished until things improve. But it doesn’t make much sense to ask them to come in when there’s precious little going on, and having assembly lines running when nobody’s buying automobiles seems unwise.

Nissan has already stalled production at its Tochigi plant — which produces Infiniti models — for the rest of this month and intends to continue doing so through much of May. Meanwhile, Nissan Motor Kyushu — which manufactures exported Rogue models in Fukuoka Prefecture — will continue operating on limited shifts before a brief 4-day closure next month.

Japanese automakers have already enacted plant closures in the United States and, more recently, have started scaling back production in their home country. Toyota slowed output to keep pace with demand and Honda said it will probably suspend production at several facilities to address supply chain problems with formerly shuttered Chinese factories that reopened on a limited basis.

[Image: FotograFFF/Shutterstock]

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13 Comments on “Nissan Temporarily Shutters Global Headquarters, Japanese Factories...”

  • avatar
    Peter Gazis

    If a tree falls in the forest and no one is there to hear it does it make a sound?

  • avatar
    Jeff S

    Perfect description of Nissan. If Nissan doesn’t make vehicles will buyers notice?

  • avatar

    Infiniti to be axed?

    Magic 8 Ball say:

    “Signs point to yes”

  • avatar

    All Nissan haters – rejoice!

  • avatar
    Jeff S

    I don’t hate Nissan as much as I hate what they have become a maker of vehicles that fall apart–Jatco transmissions. Nissan needs to get back to making more reliable vehicles that buyers want to buy.

    • 0 avatar

      I feel the same way. With the exception of the GT-R, which is very long in the tooth now, it seems like you have to settle for a Nissan now…kind of like settling for the dreaded beige Camry. 25 years ago, Nissan made cars you wanted, you desired, you sought out. Class leaders – 300ZX, 240SX (so much fun with that RWD), 4DSC Maxima, Sentra SE-R. Like everything else now, they are built to a low price point, and they are falling apart. And so has their reputation.

      • 0 avatar

        In RHD countries, you could also ad the straight six Skyline range to your list. Now Skylines in Japan are V6 thus too much like other Nissans. The GTR was the top of that range before they made the GTR its own thing, but it was a whole range doing down to family sedans. But only RWD/4WD/AWD. So if you wanted a RWD i6, you didn’t need to spend Beamer money, you had an everyman’s Japanese version.

    • 0 avatar

      I can’t escape the suspicion that Nissan’s Japanese owners are still plotting to extricate the company from the alliance with Renault, one way or another. Getting away from Ghosn’s volume over quality and reducing the size of the company may be part of the effort, if the ultimate goal is independence and full Japanese control.

      Rebuilding Nissan’s quality reputation, for a couple models with low production, would prime the company to expand later, after the Renault/French government stake is whittled down or eliminated. The Japanese government would have to play a role in achieving that, while maintaining a cordial diplomatic relationship with France.

      Once Nissan is free of foreign entanglement, it can return to Japanese attention to detail and strict standards in its offerings. I truly believe that’s the plan, and the shutdown plays some part in it – we’re not the only ones who “don’t let a crisis go to waste.”

  • avatar
    schmitt trigger

    When I lived in Mexico in the 1980s the company I worked for had a fleet of those small Nissan pickups.

    Absolutely no frills, but reliable as hell. Most so that as company vehicles they never had the personal tender love that a private vehicle has.

    Myself, I also drove what in Mexico the model was labeled a Nissan Tsuru.
    Again, ancient design, absolutely no frills, but it never failed.
    This thing was so reliable and easy to repair that became the vehicle of choice for Mexico City’s enormous cab driver fleet.

  • avatar
    Jeff S

    I wouldn’t mind it if Nissan came out with a real no frills compact pickup with a 5 or 6 speed manual.

    • 0 avatar

      Didn’t “The Government” outlaw those? Not directly, but dot-gov operates through something called “footprint” tied to fuel economy, plus emissions, plus crash tests, and other safety requirements. Add all that and the profit margin on a stripped model is zip.

      • 0 avatar

        it’s a real stretch to say “the government” outlawed something when the reason they’ve disappeared is because too few people are buying it to make it economically viable.

        that’s like saying “the government outlawed wagons.” it’s basically you starting from a conclusion and trying to contort little bits and pieces to fit your BS narrative.

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