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Nissan Lets 115 Go at U.S. Headquarters : Autos: The shake-up in Carson underscores tough times Japanese car makers are experiencing. Pressure is on others to cut costs too.

April 20, 1993|AMY HARMON | TIMES STAFF WRITER

In a shake-up that reflects the unaccustomed tough times facing Japanese auto makers at home and abroad, Nissan Motor Corp.'s U.S. sales arm laid off 115 employees Monday at its Carson headquarters.

The job cut--Nissan's largest since it set up U.S. manufacturing operations 13 years ago--is aimed at improving the company's bottom line at a time when the pressure from Tokyo to cut costs is intensifying, Nissan officials said.

"There's not a lot of cost savings in laying off 100 people but, when you're losing money, everything helps," said Don Spetner, director of corporate communications for Nissan North America.

The company is merging certain headquarters activities--for instance, combining its Nissan and Infiniti nameplates' sales and marketing staffs. It also is consolidating the legal, public relations and finance departments of several corporate units.

The announcement follows the resignation last week of the Carson unit's president, Thomas D. Mignanelli, which was widely interpreted as having been forced by company executives in Japan who were displeased with his performance. The auto maker maintains that Mignanelli left for personal reasons.

After years of lagging behind Japanese rivals Toyota and Honda, Nissan has managed to gain U.S. market share this year, largely on the strength of its new Altima mid-size sedan. But analysts note that the car's price structure, at $13,000 to $18,000, leaves little room for profit.

And Nissan, which reached peak U.S. sales of 800,000 cars and trucks in 1985, still has a way to go before it reaches its current goal of 700,000 in annual sales.

Nissan has had no major layoffs since its sales slide began--one reason it was able to find slack to trim now.

But industry analysts said the firm's financial difficulties, sparked by sluggish auto sales in the United States and Japan, are shared by all the Japanese manufacturers--including market leaders Toyota and Honda--and may prompt similar cost-cutting measures in their U.S. operations.

"I think what's going on here is a pattern we're going to see occurring with other Japanese manufacturers," said Chris Cedergren, an analyst at AutoPacific Group in Santa Ana. "We're seeing the Japanese go through some very rough times."

Indeed, in an effort to conserve cash, Mazda Motor Corp. late last year scrapped plans to launch a new luxury car division in the United States. Two other Japanese makers, Daihatusu and Isuzu Motors, unable to finance the cost of doing business here, recently pulled out of the U.S. car market altogether.

Nissan, which lost money for the first time ever in the just-completed 1992 fiscal year, has announced plans to close one of its aging car plants in Japan, the first time a Japanese auto maker has been forced to idle an assembly plant since World War II.

The restructuring of its U.S. sales arm began more than a year ago when the company sent 11% of its headquarters staff to regional offices as a way to better serve its dealership network.

Officials said Nissan had hoped to complete realignment at headquarters without laying off any of its 2,465 remaining employees. "But with all the financial pressure at this point, it made sense for us to do this," Spetner said.

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