Nissan U.S. Auto Plants on 4-Day Week ‘Indefinitely’

Nissan Motor Co., paring production as sales slump, will keep its U.S. auto-assembly plants on a four-day workweek for the foreseeable future in a step that means less pay for factory employees.
A reduced schedule that began in late 2008 will continue “indefinitely,” spokesman Steve Parrett said today. Hourly workers in Smyrna, Tennessee, and Canton, Mississippi, are being paid only when on duty, not their usual five-day week, he said.
The lack of a timetable to resume normal production shows the strain on Tokyo-based Nissan after posting an 11 percent drop in U.S. sales last year. Japan’s third-largest automaker joined Toyota Motor Corp. and Honda Motor Co., the two biggest, in trimming 2008 North American production.
“This is the kind of business scenario companies need to operate under,” said Dennis Virag, president of Automotive Consulting Group in Ann Arbor, Michigan. “Sales stink, and all manufacturers are being impacted.”
While Japan’s biggest automakers haven’t followed U.S.- based competitors in shutting factories or cutting jobs, they’re under pressure to adjust to the prospect that deliveries in the world’s biggest auto market will fall again in 2009.
Japan’s Yomiuri newspaper, citing unidentified sources, reported in its Jan. 15 edition that Nissan expects an operating loss for the fiscal year that ends in March. Toyota also is forecasting an operating loss, its first in 71 years.
Altima, Titan
Nissan builds models including the Altima sedan in Smyrna and the Titan pickup in Canton. Parrett didn’t give specifics on how U.S. production volumes would be affected by the shortened workweek.
“We don’t know when it might change or if it might change,” Parrett said.
The Smyrna plant has more than 5,000 assembly workers, and Canton has more than 3,700, according to Nissan’s Web site. They aren’t represented by the United Auto Workers.
Nissan offered early-retirement incentives last year to employees in Tennessee to shrink the workforce and pare output, the company’s second such program in as many years. Virag said Toyota and Honda may have to follow Nissan in further slowing North American production.
Honda has no plans at present to go to a four-day workweek, spokesman Ron Lietzke said today.
“We’ve announced a reduced production schedule through the first quarter,” said Lietzke, who is based in Marysville, Ohio. “We’ll continue to make adjustments based on what’s going on in the marketplace.”
‘Long Way to Go’
Toyota “is doing all it can to reduce costs,” and has “a long way to go” before a move such as laying off workers would be considered, Jim Wiseman, vice president of external affairs for the automaker’s North American production unit, said in a Jan. 12 interview at the Detroit auto show.
Wiseman declined to say whether Toyota was considering an early-retirement program similar to Nissan’s. Toyota suspended production at its San Antonio truck plant and a line in Indiana for three months last year. Employees continued to receive full pay during that time.
Nissan’s U.S. operations are based in Franklin, Tennessee. The company’s American depositary receipts fell 7 cents, or 1 percent, to $6.90 at 5:20 p.m. New York time in Nasdaq Stock Market composite trading.
An engine plant in Decherd, Tennessee, also will reduce production, using a different approach, Parrett said. He was checking on whether Nissan’s two Mexico auto factories would be affected.