Nissan seeks efficiency, cuts back U.S. design team

Growth isn’t always achieved by getting bigger. Sometimes a company has to get smaller and more efficient to proceed, and Nissan has been taking that tack for the past several years. In doing so, it has shortened new model lead times, increased the return on every dollar spent and turned company balance sheets around to the point that profit for the fiscal year ending March 31st should approach $4.5 billion.

CEO Carlos Ghosn, who lead the turnaround at Nissan, thinks the U.S. market looks weak for 2008, and is predicting a drop in global sales as a result. Nissan saw the end of 2007 bring a 27 percent rise in earnings, so perhaps they won’t be hit as hard as many, but improving efficiency and cutting back on obsolete staff positions will only help the company weather the coming year. Of the 100 design personnel in Nissan’s U.S. San Diego and Farmington Hills offices, approximately 12 are expected to accept the voluntary severance plans, most of those from the San Diego office, reports The Detroit News.

The buyouts are not expected to affect output at all – in fact, because of the shortened development times for new models, Nissan expects output to remain the same despite removing 12 percent of its work force. For instance, lead time in developing a new model has fallen from 48 months to only 24 months over the last ten years, and Nissan hopes to cut that back to just 12 months soon. The San Diego office primarily focuses on development of new ideas and concepts, while the Farmington Hills branch takes over the vehicles as they near production. Perhaps the cuts at San Diego indicate a lessened focus on new models, the company instead focusing on bringing existing ideas, like the recently shown Forum concept, to market.