Faced with slumping vehicle demand amid the coronavirus pandemic, Nissan North America is cutting the hours of U.S. salaried employees.
Under a voluntary program, about 9,000 Nissan and Infiniti employees, effective immediately, will be asked to take 10 days off through the end of June, the company said late Monday. Top executives will be excluded.
The automaker will pay employees and provide health care benefits during the downtime, company spokesman Chris Keeffe said. To offset some of the cost, the company plans to tap a federal employee retention credit that is part of the $2 trillion Coronavirus Aid, Relief, and Economic Security Act approved by Congress in March.
Nissan North America's U.S. sales dived 30 percent in the first quarter as consumer demand for cars and light trucks fell in the wake of the viral outbreak.
"The COVID-19 pandemic has resulted in lower vehicle demand and Nissan is adjusting its business operations in the U.S. in response to this evolving situation," Keeffe said. "We need to right-size our operations for more efficient organization; at the same time protect the health of employees and also enable us to resume our business recovery track when the economy improves."
Nissan is making additional cost-cutting moves.
Starting June 1, Nissan will temporarily suspend the company match under 401(k) plans.
The automaker will also tweak relocation benefit programs for U.S. employees and new hires. Instead of reimbursing individual expenses incurred during a relocation, Nissan will provide a lump sum payment.
Nissan was struggling financially long before the coronavirus arrived.
Aging products, coupled with years of heavy retail discounts and a reliance on less profitable fleet sales, left Nissan's retailers with sluggish customer traffic and weak balance sheets. About 40 percent of Nissan dealerships were losing money or breaking even early this year.
The automaker is pivoting away from an aggressive pursuit of market share championed by former Chairman Carlos Ghosn, while orchestrating a product offensive that involves updating about 70 percent of its portfolio by mid-2021.
Nissan North America's U.S. market share dropped to 7.3 percent through the first quarter, compared with 9.1 percent through the first quarter of 2019.
