Nissan Motor Co. is preparing to reduce its workforce in the United States, its largest market, by nearly 2,000 employees. The job cuts will take place in its manufacturing plants and other production facilities by the end of this year.
Along with the job reductions, Nissan is also planning to lower its vehicle production in the U.S. by about 25%. The company has decided to scale down operations at two major plants: the Smyrna plant in Tennessee and the Canton plant in Mississippi. These changes come as part of Nissan’s broader business restructuring efforts, which are linked to ongoing discussions with Honda Motor Co. regarding a potential management integration.
Major Production Cuts in U.S. Plants
Nissan has been facing challenges in the U.S. market, which have affected its business performance. To cope with these difficulties, the company plans to reduce production at two of its largest plants in the country.
Currently, both the Smyrna and Canton plants operate four assembly lines each. Nissan has decided to shut down one assembly line at each facility. The production cuts will begin in April at the Smyrna plant, while the Canton plant will see reductions in autumn.
These changes will significantly impact the total number of vehicles produced in the United States. At present, the two plants together have a production capacity of approximately 1 million vehicles annually. With the closure of two assembly lines, the overall production capacity will decrease by about 25%.
Despite these changes, Nissan has stated that the assembly line facilities will not be completely removed. This means that if market conditions improve in the future, the company can restart production at these lines and increase output again.
Job Reductions and Workforce Impact
As part of its restructuring, Nissan is planning to lay off between 1,500 and 2,000 employees in the United States. The company had already seen hundreds of voluntary resignations from employees in December last year.
Nissan had previously announced a global job reduction plan in November 2024. Under that plan, 9,000 positions were to be eliminated worldwide, with about 70% of the cuts affecting manufacturing jobs. The latest job cuts in the U.S. are a continuation of these efforts.
These workforce reductions are expected to impact employees at various levels, including production workers, engineers, and administrative staff. The company has not yet specified whether severance packages or assistance programs will be offered to affected employees.
Delays in Electric Vehicle (EV) Production
Another major change in Nissan’s strategy involves its electric vehicle (EV) production plans in the United States. The company had previously announced plans to begin producing five EV models at the Canton plant in 2026. However, due to ongoing financial struggles and restructuring efforts, Nissan has decided to delay this plan until 2028 or later. Additionally, the number of EV models to be produced at the plant will be reduced from five to four.
This delay is a setback for Nissan, as the EV market is growing rapidly in the United States. Competitors such as Tesla and Ford have made significant progress in expanding their EV lineups. Nissan’s decision to slow down its EV production could make it more difficult for the company to compete in the future.
Struggles in the U.S. Market
North America is Nissan’s biggest market, contributing to nearly 50% of its global sales. However, in recent years, Nissan’s performance in the region has declined significantly.
In the half-year financial report released in September 2024, Nissan reported an operating loss of ¥4.1 billion. This is a major decline compared to the previous half-year period, when the company had reported an operating profit of ¥241.4 billion.
Additionally, Nissan’s total sales have dropped by about 40% since March 2017. One of the main reasons for this decline is the company’s failure to introduce hybrid vehicles in the U.S. market. Hybrid vehicles have become increasingly popular in the country, and competitors like Toyota and Honda have capitalized on this trend. Nissan’s inability to meet this demand has contributed to its declining sales.
The company now faces an urgent need to improve its market position. However, it remains uncertain whether the planned restructuring efforts will be enough to turn around its declining business performance.
Potential Political Challenges
In addition to financial struggles, Nissan could face political challenges in implementing its restructuring plan in the United States.
Former U.S. President Donald Trump, who has expressed strong support for domestic job creation, could oppose Nissan’s job cuts. Trump has frequently criticized companies that reduce U.S. manufacturing jobs or move production to other countries.
Moreover, Trump has proposed imposing a 25% tariff on vehicles imported from Mexico. This could have a significant impact on Nissan, as the company exports approximately 200,000 vehicles from Mexico to the United States each year. These imports account for about 20% of Nissan’s total U.S. sales.
If such tariffs are imposed, Nissan’s production costs could rise, further affecting its financial performance. This could also force the company to make additional changes to its manufacturing and supply chain strategies.
