Japan's second-biggest vehicle manufacturer Nissan Motor Co announced on Thursday that its U.S. subsidiary will stop operating for two days starting January next year as the firm attempts to solve its sales miseries.
After the company's net income fell this fiscal year, the popular Japanese auto maker tried to cut prices, hurt by a stronger yen and declining revenue in China as well as in the U.S. The company was even pressured to trim down its operating income outlook to a low of 11 years.
"To enhance business performance, Nissan North America will impose two office closures in the U.S. from January 2-3, 2020," Nissan revealed in a statement. The closures would not affect dealers including its Infiniti product, the firm said.
The closing would affect the company's headquarters in Nashville suburban and manufacturing facilities in Smyrna and Decherd, Alabama, Tennessee and Canton, the report bared.
No Work, No Pay
Nissan's workforce will not get any pay during the closures, but the company's dealership branches in the U.S. will remain open for business.
The decision by Nissan to suspend two-day services is very unusual: Of 14,500 U.S. workers, the move may turn into millions of dollars savings for the Japanese automaker that saw its sales drop in the United States this year by 7.8 percent.
For the Japanese automaker, which is down 8.6 percent relative to 2018, conditions are not much different in its Canadian operations. Nissan is not the only automaker that is struggling in the region.
In 2019, passenger car sales fell by more than 15 percent with this year's double-digit revenue declines from Volkswagen, Infiniti, General Motors, Cadillac, MINI, and Maserati.
The Others Are Fine
As of November this year, Volkswagen, Toyota, Honda, Hyundai, Lexus, Mitsubishi, Kia, and Porsche are the only car companies that are currently showing decent sales growth.
An aging lineup of sport utility vehicles could be part of Nissan's problems. For over three years, the Nissan Rogue and Pathfinder operating in the main compact an mid-size SUV markets have not been completely revamped.
Nissan, coping with decade-long weak profits, reported a third straight monthly drop in U.S. revenue in November, shipping fewer than 100,000 cars.
This month, Makoto Uchida took over as Chief Executive Officer of the company to try to stabilize an organization in crisis since the detention of former Chairman Carlos Ghosn a year earlier. Uchida is slogging through a corporate overhaul that will pay for 12,500 workers.
