Nissan Considers Global Factory Sharing with Dongfeng Amid Major Restructuring

Hadisur Rahman, JadeTimes Staff

H. Rahman is a Jadetimes news reporter covering Business

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Image Source: Getty Images

Nissan Motor Co. has announced its willingness to explore factory-sharing arrangements with its Chinese state-owned partner, Dongfeng Motor Corporation, as part of a significant restructuring of its global operations. The Japanese automaker, which employs thousands in the UK, indicated that it could integrate Dongfeng into its global production ecosystem, a move aimed at enhancing efficiency and collaboration.

This announcement comes on the heels of Nissan's decision to lay off 11,000 workers and close seven factories worldwide, although the company has not specified which locations will be affected. Speaking at a Financial Times conference, Nissan's Chief Operating Officer Ivan Espinosa addressed the situation at the company's Sunderland plant, stating, "We have announced that we are launching new cars in Sunderland... In the very short term, there's no intention to go around Sunderland."

The latest job cuts add to the 9,000 layoffs announced in November, reflecting the company's ongoing struggle with weak sales in critical markets such as the United States and China. The total workforce reduction represents approximately 15% of Nissan's global staff, as the company aims to cut its production capacity by 20% in response to declining demand.

Nissan has faced challenges in penetrating the Chinese market, the largest automotive market in the world, where intense competition has led to falling prices. The company has partnered with Dongfeng for over two decades, collaborating on vehicle production in Wuhan, China.

Globally, Nissan employs around 133,500 people, with approximately 6,000 workers based in Sunderland. The company has also experienced a series of leadership changes, including the recent replacement of former CEO Makoto Uchida by Espinosa, who previously served as the chief planning officer and head of the motorsports division. This leadership transition followed the collapse of merger talks with Honda in February, which failed to yield a multi-billion-dollar partnership.

In its latest financial report, Nissan revealed an annual loss of 670 billion yen (approximately 4.6 billion or £3.4 billion), exacerbated by tariffs imposed during the Trump administration. However, there is a glimmer of hope for the company, as its battery partner AESC recently secured a £1 billion (1.3 billion) funding package from the UK government to establish a new battery plant in Sunderland. This facility is expected to produce batteries for Nissan's electric models, including the Juke and Leaf.

Chancellor of the Exchequer Rachel Reeves, during her visit to the site, emphasized the importance of this investment, stating that it would "deliver much-needed high-quality, well-paid jobs to the North East."

As Nissan navigates these turbulent times, its potential collaboration with Dongfeng and ongoing investments in electric vehicle technology may play a crucial role in the company's efforts to stabilize and grow in an increasingly competitive automotive landscape.