Car manufacturing giant Nissan is reportedly “on the brink of collapse,” putting thousands of American jobs at risk.
The automaker may now only have 12 months to survive, it has been warned.
The Japanese auto firm that employs 17,000 people in the US, and tens of thousands more around the world, has embarked on a huge cost-cutting program.
It comes after the company has been suffering heavy losses.
Last month, Nissan said it would axe 9,000 jobs and 20 percent of its global manufacturing capacity.
The cuts come as the company scrambles to reduce costs by $ 2.6 billion in the current fiscal year amid a sales slump in China and the US, its two biggest markets.
Nissan CEO Makoto Uchida is taking a 50 percent pay cut and it has now been reported that chief financial officer Stephen Ma is stepping down.
However, insiders fear the moves could not be enough as Nissan struggles to stay competitive with rivals.
Many of Nissan’s rivals have pushed ahead more successfully with popular hybrid cars.
The warnings come as a strategic deal signed with competitors Mitsubishi and Renault back in 1999, covering European, Japanese, and US markets, could be ending.
Two anonymous “senior officials” at Nissan have been quoted by the Financial Times as saying that Renault is now looking at reducing its financial stake in Nissan.
That could leave Nissan requiring cash backing from the Japanese or US governments over the next year.
The company would need such investments to remain in business, according to the report.
The company risks running up its largest-ever debt by 2026.
Nissan could potentially end up owing as much as $5.6 billion, it is suggested.
The firm’s worldwide sales slumped by 3.8 percent to 1.59 million vehicles in the first half of the current financial year, largely driven by a 14.3 percent fall in China.
The FT quoted a “senior official” at Nissan as saying:
“We have 12 or 14 months to survive.
“This is going to be tough.
“And in the end, we need Japan and the US to be generating cash.”
Early last month, Nissan’s head of manufacturing Hideyuki Sakamoto told a news conference:
“Globally, we currently have 25 vehicle production lines.
“Our current plan is to reduce the operational maximum capacity of these 25 lines by 20 percent.
“One specific method for this is to change the line speed and shift patterns, thereby increasing the efficiency of operational personnel.”
And CEO Uchida told reporters:
“This has been a lesson learned and we have not been able to keep up with the times.
“We weren’t able to foresee that hybrid electric vehicles and plug-in hybrids would be so popular.”
There have been suggestions that Nissan could strengthen ties with Japan’s second-largest carmaker Honda.
Honda could buy a stake in the smaller firm.
However, sources were quoted describing such a deal as a “last resort.”
Toyota is the largest automaker in both Japan and the world.
The company is responsible for about 10 million vehicles each year – compared to Nissan’s 3.4 million.
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