• The company is also preparing to offer early retirement to several hundred staff in Japan: Nikkei

TOKYO: Nissan Motor said on Friday it would abandon a plan to build a $1.1 billion factory for electric vehicle batteries on Japan’s southwestern island of Kyushu, marking the latest change of plans for the troubled automaker.

The company is also preparing to offer early retirement to several hundred staff in Japan, the Nikkei newspaper reported later on Friday, a move that would mark the first such headcount reduction at home in 18 years. Nissan declined to comment on the Nikkei report.

Japan’s third-biggest automaker had announced in January the plan for a lithium iron phosphate (LFP) battery plant in the city of Kitakyushu that was set to create about 500 jobs with an investment of 153.3 billion yen ($1.05 billion).

“Nissan is taking immediate turnaround actions and exploring all options to recover its performance,” the company said in a statement on the decision, indicating a willingness at Nissan to scale back its domestic market ambitions.

“After careful consideration of (the) investment efficiency, we have decided to cancel the construction of a new LFP battery plant in Kitakyushu City, Fukuoka Prefecture.”

On the job cuts, the Nikkei said Nissan would start accepting early retirement applications this fiscal year, targeting several hundred staff in domestic administrative divisions.

The automaker has already said it will slash 9,000 jobs and reduce global capacity by 20% as part of its restructuring plans. The last time it announced an early retirement programme in Japan was in 2007, when it cut 1,500 jobs as it aimed to match lower production in a shrinking domestic market.

New CEO Ivan Espinosa, who took over from Makoto Uchida as chief executive last month, is currently restructuring Nissan’s operations. The company is shedding employees, reducing production capacity and closing plants.

For the battery factory, the Japanese government had earmarked a subsidy of up to 55.7 billion yen. The plant was supposed to start supply in July 2028 or later and have an annual production capacity of 5 gigawatt-hours, materials posted on Japan’s industry ministry’s website showed.

Nissan said last month it expected a record net loss of 700 billion yen to 750 billion yen ($4.80 billion-$5.14 billion) for the financial year that ended in March due to impairment charges.

The company is set to provide its outlook for the current financial year and update on its recovery actions when it announces full-year financial results on Tuesday.

Reuters