Buyouts part of Nissan push to shrink its U.S. operations

Nissan last week moved to shrink its regional sales organization footprint and prune its U.S. work force to adjust for a decline in its U.S. business. The automaker offered voluntary buyouts to U.S. hourly and salaried employees who are 52 years old or older.

Starting July 1, Nissan Division will implement a smaller regional sales structure, closing its Northwest and Mountain regions and shrinking the number of sales offices from eight to six.

"Like many other automotive companies, Nissan North America is taking proactive steps to assess our structure, workflow and operational efficiencies amid a challenging industry environment," Senior Vice President Airton Cousseau said in a letter to dealers last week, obtained by Automotive News.

"This reorganization will create office synergies that will enable a leaner organization while still focusing on dealer profitability and your ability to continue providing a quality customer experience. You will continue to receive all the support you need."

A spokesman declined to say how many employees the company expects to accept the voluntary separation program. He also declined to say whether layoffs will take place if there are not enough volunteers for the buyout program.

Nissan Group's U.S. sales tumbled 9.9 percent to 1.35 million vehicles last year, in an overall market that fell 1.2 percent. Some of that is the result of an effort to reduce rental fleet sales.

Last year, Nissan North America offered buyouts to hundreds of salaried employees in the U.S. And at year end, Nissan said it would cut employee travel budgets by 50 percent and put the entire U.S. organization on two days of unpaid furlough in January.

News of the sales office reorganization put some retailers on edge.

"Right now, we already have problems getting the support we need in a timely manner," said a dealer who requested not to be identified. "Now, with less work force and having to foster new relationships, I don't think the sales reorganization is going to be a good thing for the dealers."

But the belt-tightening is unavoidable, said Nissan National Dealer Advisory Board Chairman Scott Smith. When volume falls, dealers trim the fat and find ways to economize, said Smith, president of Smith Automotive Group in Atlanta.

"Nissan, too, is economizing," he said. "They are going to right-size the business, so they can afford to sell cars."