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Is layoff coming? Slump putting pressure on Nissan’s U.S. plant

SHARE Is layoff coming? Slump putting pressure on Nissan’s U.S. plant

Nissan executives at Smyrna, the company's North American plant in the heart of Tennessee, like to boast they've never had a layoff at the nonunion facility.

"We plan never to have a layoff. We've always had a very stable work force," says Daniel Gaudette, vice-president of manufacturing at Smyrna, which is set to produce 300,000 vehicles this year compared with 398,000 in 1997.But if a sales slump persists, Nissan may be hard-pressed to uphold its undertaking to preserve jobs. The United Auto Workers, which has been seeking a foothold at the plant, will be watching closely following Nissan's decision to halt production for 24 working days this year.

Bulging inventories of its locally produced and imported vehicles have seen supply reach 119 days. Nissan wants to get supply down to 75 days by October.

Nissan's problems in North America, however, go deeper than a slide in sales of its locally made vehicles, principally the Sentra. The company has also been "behind the curve," industry analysts say, in developing the right product mix.

It has been slow to introduce a sports utility vehicle (SUV) specifically for the U.S. market, which has left it too dependent on the Sentra, Altima compact and 200 SX sports coupe.

Nissan plans to rectify the problem in the next year or so by introducing an "entry level" SUV designated the "133." But the company faces increasingly stiff competition as competitors have geared up production of such vehicles to meet extraordinary demand. Nissan has been importing its Infiniti and Pathfinder SUVs, but recognizes it needs a local product to make serious inroads.