as it is projecting its first loss since 2000. Toyota is also heading for a loss. This AP story (from Yahoo) will give the details.
Apparently Japanese companies end their fiscal years in March. Nissan is projecting a loss of 265 billion yen ($2.9 billion) while Toyota, now predicting its first loss since 1950, one of 350 billion yen ($3.85 billion).
Honda is the only one of the Japanese big three not expecting to show a loss. For the three months ending in December, Nissan lost 83.2 billion yen for the October-December period from a 132.2 billion yen profit for the same period the previous year. That was its first quarterly loss since 2003.
In Japan things are done differently.
Note the following:
Nissan's directors on the board will forgo bonus pay for the year ending March. Their salaries, as well as the salaries of corporate officers, will be reduced by 10 percent, while managers' salaries will be reduced by 5 percent.
Nissan is also instituting "work-sharing":
In work-sharing, an employee's work load gets doled out to two or more employees, but they also must take a pay cut. The effort allows troubled companies to avoid layoffs while adjusting to plunging production. The benefits are that skilled staff aren't lost and the arrangement can be quickly dropped, allowing production to be ramped up without delay, once the industry recovers.
Compare the cuts taken by the Board and managers to the bonuses Wall Street and the banking industry insisted they required. And remember that the ratio of pay between top executives and average workers is far less in Japan than are the multiples in the hundreds typical of US Corporations.
Nissan has been somewhat more vulnerable, as - unlike Toyota and Honda - it does not offer gas-electric hybrid models (update - apparently they offer a hybrid Altima sedan licensing Toyota's technology - h/t: daninoah). It is lowering its capacity by about 20%, and moving to reduce inventory by a substantial amount, from 630,000 units in March of 2008 to 480,000.
Nissan sold 731,000 vehicles worldwide in the quarter ended Dec. 31, down 18.6 percent from a year earlier. Nissan's vehicle sales suffered especially in the U.S., where they dropped 29.7 percent in January.
At a minimum, the the industrial nations are in the midst of a severe world-wide recession. Because of globalization, the effects of a crisis in one of the interconnected nations cannot be easily contained. Japanese automakers are shedding jobs not only at home but also in the US, in Spain, in England. And as we well know, as industrial jobs are lost local retail establishments lose business and lay off workers, house prices drop, tax revenues fall, and government services are often cut, resulting in even further effects on the downward spiral.
What is the responsibility of a corporation to the communities in which it operates? What are its responsibilities to its workforce? How can the pain of loss be equitably apportioned among shareholders, directors, management,and workers? A preliminary glance at this story seems to indicate that the Japanese are doing their cuts more equitably, at least at home, than we have seen among American corporations. Is it possible that we can learn things from Japan other than the inaccurate insistence of some Southern Senators that UAW wages and benefits are too high?
I thought it worthwhile to bring this story to your attention. Do with it what you will.
Peace.