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Nissan to slash jobs after forecasting annual loss

  Nissan Motor joined a growing list of automakers warning of red ink this year on the global car slump, marking its first loss since CEO Carlos Ghosn took the reins a decade ago.

Japan’s No.3 automaker Nissan also said it would slash production in the year to March by 20%, and group-wide headcount by 20,000 workers by the end of March 2010, mostly through natural attrition in Japan.

Last week, Toyota Motor tripled its annual operating loss forecast citing a faster-than-expected sales slump in the main US, Japanese and European markets. Honda Motor also cut its forecast last month, but expects to stay in the black.

“Earnings are going to be bad at automakers for some time,” said Tomomi Yamashita, senior fund manager at Shinkin Asset Management. “You’ve got the currency problem and the amount of production adjustment that’s ahead,” he said, adding that automakers could be in the red for a few more quarters.

Nissan now expects an operating loss -- its first in 14 years -- of ¥180 billion ($1.97 billion) for the year to March 31, instead of the ¥270 billion profit it projected three months ago. Consensus forecasts from 19 analysts had put the loss at ¥70 billion.

Nissan, 44% owned by Renault, expects its net loss at ¥265 billion instead of a ¥160 billion profit. Rising debt at Renault, in which Nissan holds 15%, has also raised worries about any knock-on effects on the Japanese automaker.

Nissan’s shares have dived more than 70% in the last 12 months, while Toyota and Honda are down 47% and 30%. Nissan has shed $12 billion in market value since Ghosn arrived from Renault to rescue Nissan in 1999. Sales in major markets started the year on a bleak note. Nissan’s sales in the United States, its biggest market, fell 33% in January, and by a similar rate in Japan.

For October-December, Nissan made an operating loss of ¥99.2 billion and a net loss of ¥83.2 billion. A year ago, it made an operating profit of ¥211.9 billion and net profit of ¥132.2 billion. Third-quarter revenue fell by about a third to ¥1.8 trillion.

Nissan’s shares are the worst performer in the domestic auto sector in the year to date, falling 13% against a 7% rise in Tokyo’s transport sub-index. The stock ended down 5.8% at 261 yen ahead of the results. (Reuters)