Trump's 25% tariff on imported auto parts kicks in
Nissan is slashing about 15% of its global work force, or about 20,000 employees, as the Japanese automaker reported a loss Tuesday for the fiscal year that just ended amid slipping vehicle sales in China and other nations, and towering restructuring costs.
Nissan said it will reduce the number of its auto plants to 10 from 17, under what it called its recovery plan to carry out "decisive and bold actions to enhance performance and create a leaner, more resilient business that adapts quickly to market changes." It did not say which plants were being closed but confirmed the closures will include factories in Japan.
"We have a mountain to climb," CEO Ivan Espinosa told reporters, stressing the task will not be easy, requiring discipline and team work. "Starting today, we build the future for Nissan."
The job cuts to be done by March 2028 include the 9,000 head count reduction announced last year. Nissan also previously announced the scrapping of plans to build a battery plant in Japan.
Espinosa, who took the helm earlier this year, said the latest plans followed a careful review of operations, to align production with demand, including coming up with market and product strategies. Nissan will also leverage its partnerships such as the one with Renault SA of France in Europe and Dongfeng Nissan in China, he said.
Nissan said President Trump's tariffs on auto imports also hurt the company's results. The Yokohama, Japanese-based automaker racked up a loss of $4.5 billion for the fiscal year through March. It also said its recovery plan includes trying to reduce costs by $3.4 billion.
"As new management, we are taking a prudent approach to reassess our targets and actively seek every possible opportunity to implement and ensure a robust recovery," Espinosa said
Nissan aims to return to profitability by fiscal year 2026.
But Nissan Chief Financial Officer Jeremie Papin acknowledged the automaker faces serious challenges. Nissan did not give a profit projection for the fiscal year through March 2026, citing uncertainties.
Tariffs weighing on automakers
The Trump administration in March imposed a 25% tariff on the roughly 8 million vehicles assembled abroad that the U.S. imports annually.
General Motors earlier this month said it's lowering its profit expectations for the year as it braces for a potential impact from auto tariffs as high as $5 billion in 2025. The revised forecast came after Mr. Trump signed executive orders in April to relax some tariffs on automobiles and car parts.
Ford Motors also pointed to higher U.S. tariffs in announcing last week that it is raising prices on three models produced in Mexico. And Toyota last week said Mr. Trump's tariffs would cost the company $1.3 billion in just two months. The carmaker stopped short of making predictions on future tariff hits on business, with Toyota CEO Koji Sato saying that any future impact would be "very difficult to forecast."
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