Banele Ginidza
Nissan’s recent global restructuring initiative, known as Re:Nissan, has sparked widespread speculation about its far-reaching effects on South Africa’s automotive industry.
The announcement comes amid a wave of employment cuts and factory closures, following the company’s staggering R82.2 billion revenue loss for the fiscal year 2024.
As Nissan endeavors to streamline operations by reducing its global workforce by 20 000 on top of last year’s 9 000 job cuts, concerns mount about the potential closure of its Rosslyn Plant, strategically located outside Pretoria.
The Re:Nissan strategy, also dubbed “The Arc,” was unveiled last year as part of a broader plan to consolidate its 17 factories down to 10 by 2027, while also modifying its research and development programmes.
Under the guidance of CEO Ivan Espinosa, the objective is to claw back R61 trillion in fixed and variable costs by establishing a more efficient operating framework for profitability by fiscal year 2026.
Espinosa’s candid assessment highlighted the high cost structure and volatile global market conditions that necessitate these changes.
“The reality is clear. We have a very high cost structure. To complicate matters further, the global market environment is volatile and unpredictable, making planning and investment increasingly challenging,” Espinosa said in a statement on Nissan Japan’s strategy.
Among the factories earmarked for closure are the Oppama and Shonan facilities in Japan, alongside additional plants in Mexico, India, and Argentina.
With the prospect of closing the Rosslyn Plant, which has been operational since 1966, the implications for the local job market are worrying, particularly following an initial cut of 400 positions in 2023 stemming from the cessation of NP200 production.
The Motor Industry Staff Association (MISA) on Monday said the announcement had not yet filtered through to its membership.
“MISA has not received notifications of possible restructuring in accordance with the provisions of the Labour Relation Act from Nissan, although as indicated, they might come from different dealership groups as was the case with Volvo Cars South Africa,” MISA said in response to enquiries.
In contrast, Nissan’s Re:Nissan strategy arguably offers a silver lining for South Africa’s automotive sector, as evidenced by a recent R3bn investment aimed at modernising the Rosslyn Plant for new Nissan Navara model production.
This investment is projected to bolster capacity by 30 000 units per year and create approximately 400 new jobs, suggesting that despite potential setbacks, there was scope for growth and opportunity in the market.
The Re:Nissan plan also includes the introduction of new passenger vehicles, emphasising a shift from traditional bakkies to more popular segments like electric vehicles (EVs) and SUVs to the South African market.
This strategic pivot could bolster Nissan’s competitiveness and market share, with ambitions to reach over 15% in South Africa, aided by government incentives such as the Automotive Production and Development Programme.
Industry experts assert that while Nissan’s future plans signal a period of investment and growth, the anticipated closure of the Rosslyn Plant could still be devastating for its workforce, especially in light of preceding layoffs.
In 2022, the National Union of Metalworkers of South Africa (Numsa) picketed outside the Japanese Embassy in Pretoria over, in part, Nissan South Africa’s failure to engage the union on Nissan EV Ambition 2030 Vision and the lack of transparency on the future of the South African Plant amidst challenges posed by 4th Industrial revolution.
Numsa demanded that Nissan follow the principles of a Just Transition as some workers were likely to be displaced because the new technology is not labour intensive.
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