Nissan to promote Japan-based contract workers to full-time
- The promotions, which will increase expenses, are a sign of Nissan’s confidence in its outlook as the carmaker makes progress in its push to cut 300 billion yen ($2.8 billion) in annual fixed costs.
Nissan Motor Co. is moving to promote all contract workers in Japan to full-time positions as the automaker’s push to cut fixed costs gives it more room to invest in its talent pool.
About 700 contract employees at Nissan’s plants, R&D centers and head office in Yokohama will be made full-time employees on April 1, Azusa Momose, a spokeswoman for the company said, confirming an earlier Bloomberg News report. Nissan will also abolish its system of hiring contract workers.
The promotions, which will increase expenses, are a sign of Nissan’s confidence in its outlook as the carmaker makes progress in its push to cut 300 billion yen ($2.8 billion) in annual fixed costs. The cuts have afforded the company a greater ability to push to retain skilled personnel by bringing them on full-time, a person with knowledge of the matter said.
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The hiring plan will “enable more efficient and effective business operations as well as improve individuals’ motivation and skills," Momose said.
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Nissan announced in May plans to reduce its annual fixed costs through measures such as closing production lines and slashing capacity by 20%. This came after the Japanese automaker posted a 671 billion yen net loss for the fiscal year ended March, its biggest in 20 years.
The company posted an operating loss of 4.8 billion yen for the July-September quarter, shrinking it significantly from the previous quarters’ loss of 154 billion yen.
Still, Nissan is forecasting a net loss of 615 billion yen for the current fiscal year ending March, and if the company’s performance fails to recover, the new batch of full-time employees may prove a drag. In Japan, full-time workers are legally much harder to dismiss than contract employees who can be let go after their contract periods end.