Nissan to halt operations at one of Japan’s earliest major car factories
Days before a crucial election in the fourth-largest economy in the world, Nissan announced intentions to stop production at the first robot-powered automobile plant in Japan after nearly 70 years of operation.
The end of an era for one of Japan's most famous auto factories, which has manufactured nearly 18 million vehicles, was marked on Tuesday when the Japanese automaker said that it would close the Oppama facility if it could not find a buyer by the time production stopped in March 2028.
Ivan Espinosa, Nissan's new CEO, who is working to turn around the faltering automaker, stated, "We understand this is a very, very painful thing to go through." He continued by saying that the facility "helped shape Nissan's identity and has created numerous vehicles cherished by customers worldwide."
The statement is a component of Espinosa's extensive reorganization strategy, which aims to reduce its global production network from 17 to 10 plants and eliminate 20,000 jobs.
SBI Securities' head of equities research, Koji Endo, described the new management team's quickness in developing its restructuring plan and closing Oppama as "impressive." He clarified, however, that this is only the beginning line.
For Japanese Prime Minister Shigeru Ishiba, the choice comes at a delicate moment as the country votes in an upper house election on Sunday that is seen as crucial to his survival.
The plant is situated in Kanagawa, a crucial prefecture for influential Japanese politicians, including agriculture minister Shinjiro Koizumi and former prime minister Yoshihide Suga, both of whom have seats close to the plant.
Shortly after the reorganization plan was unveiled in May, Koizumi met with Espinosa and publicly chastised the firm for inflaming employee anxiety over the absence of information regarding manufacturing closures.
The latest shift of power in the global automotive sector from once-dominant Japanese businesses to emergent Chinese EV rivals is the closing of a large-scale vehicle facility in Japan.
Despite having 2,400 employees, the Oppama factory has had appalling utilization rates of about 40%.
Espinosa hopes to achieve 100% operating rates and 15% cost savings throughout its Japan businesses by concentrating manufacturing in Nissan's Kyushu facility.
As one of Japan's earliest large-scale production facilities and the nation's first auto plant to employ welding robots in 1970, Oppama, which opened in the early 1960s, contributed to Nissan's ascent to prominence as a worldwide automotive powerhouse in the postwar era.
Espinosa refuted that there were ongoing discussions regarding a joint venture or contract manufacturing agreement for the factory, despite claims in the local media that Foxconn, an iPhone supplier, was in talks with Nissan over Oppama.
Espinosa stated, "We are thinking about either selling the assets or reusing the land."
With Nissan ceasing production in Argentina and turning over its operations in India to alliance partner Renault, Oppama is the third factory impacted by the automaker's restructuring plans.