Thu, Feb 22, 2007 - Page 6 News List

Struggling Nissan to offer buyouts at Tennessee plants

AFP , DETROIT, MICHIGAN

Japanese automaker Nissan underscored its continuing difficulties on Tuesday by announcing it planned to offer buyouts to all employees at the company's two Tennessee plants.

The buyouts are a first for Nissan North America, which hopes that at least 300 of the 6,200 eligible employees will accept.

Nissan saw US sales fall 5.3 percent last year and recently said its first drop in annual profits since chief executive Carlos Ghosn took the helm of the company in 1999 and helped steer the automaker from the brink of bankruptcy to record profits.

The profit warning came as Nissan reported a 22.6 percent slump in net earnings in the quarter to December.

The decline in third-quarter earnings forced Nissan to revise its outlook for the full year downward by 12 percent.

The revision means that Nissan's earnings will decline during the full fiscal year for the first time in seven years.

The setback at Nissan comes as Japanese rivals Toyota and Honda continue to make great strides in the US with their fuel-efficient vehicles. Nissan has been slower to embrace gas-electric hybrid vehicles.

The buyout offer includes a US$45,000 lump-sum payment and an additional US$500 for each year of service.

The program will not be offered to employees at other Nissan manufacturing locations in North America, Nissan officials said.

The packages were not as generous as those offered by rivals General Motors Corp and Ford Motor Co, which have recently eliminated as many as 71,000 jobs among them.

Ford, for example, offered lump-sum payments of US$100,000 to US$140,000 to workers last fall.

Nissan said that the job cuts could be partially attributed to productivity gains at the Tennessee plants, which have outpaced low employee attrition levels.

Higher demand for passenger cars -- such as the Altima sedan and soon-to-be-released Altima Coupe -- combined with lower demand for trucks and sport utility vehicles have resulted in a manufacturing mix that is less labor-intensive to build.

This, in turn, means that fewer assembly workers are required, Nissan said in a statement.

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