The automotive industry is in a state of flux at the moment – more so than any other year. There is a push for new technologies yet the factories are still geared to building older designs and several refreshed models from the big three in the US are putting pressure on the foreign manufacturers.
Earlier this year, Nissan announced that it was trimming shifts at one of its plants in Mississippi. Motoring Weekly has written about other manufacturers in Europe trimming due to sales that are sinking, free trade agreements starting or simply because a model series is coming to the end of its life and operationally it will not get replaced.
Nissan’s woes, apart from the crisis that the Renault-Nissan-Mitsubishi Alliance is suffering, is simply down to being out gunned by Ford, General Motors and FIAT Chrysler. The factory in Canton, Mississippi assembles commercial vans – the NV range – and the Titan and Frontier trucks. One of the two shifts that makes the NV will go and importantly, one of the three shifts that makes the trucks will go. As Nissan, like other manufacturers in the US, employ assembly workers on a contract basis, it is fairly easy to remove these jobs with minimal pain to the company and plenty for the workers.
The Titan and NV have seen their sales drop over the last year, however the Frontier has seen as small increase. The trucks are up against resurgent models from Detroit which are selling very well, so well that the Big Three are increasing production at the expense of their sedans. With two shifts removed, the company believes that it will reach a point where the production and sales numbers will converge – the nirvana when it comes to manufacturing operational management. This assumes that sales remain as they are and do not slide further.
For Nissan, if they can reduce the volumes of vehicles sitting in the supply chain, it means that the dealers will not have to sit on too much unsold inventory and will be able to sell without much discounting based on too much supply. They will still need to consider how they make sales against the Detroit manufacturers because today, the Titan takes a mere 2.1% of the market it is targeting! On the horizon, the plant in Canton will be building the next generation Frontier, a truck that the company hopes will stop the slide in sales against its main competitors. Perhaps then, we will see some good news for the workers.
Nissan workers south of the border were also told that they were going to see job losses – 1,000 are going at factories in Mexico, to go alongside the estimated 700 in the US. Nissan’s sales in Mexico have fallen off a cliff, far worse than in the US and as with the northern factory, the operational bean-counters are adjusting the production volumes to meet the lower sales volumes. What is interesting about both set of job losses, is that the Presidents of both countries have been very quiet about them. In the US, there was a promise that manufacturing jobs would be safe and yet we are seeing shifts being cut, contract jobs quietly falling away which must surely impact the local economies around the plants.
One hopes that Nissan’s starts to sell products that the consumer wants.