Nissan's UK plant furloughs 800 workers amid chip shortage

TOKYO — Nissan Motor has furloughed about 800 workers, or 10% of the employees at its U.K. assembly plant, as a semiconductor shortage squeezes production.

The layoffs will continue until supplies of components return to normal levels. U.S. carmaker General Motors has also laid off workers, but Nissan is the first Japanese automaker to make such a move in response to the global semiconductor crunch.

The furloughs at the Nissan U.K. plant, which employs about 6,000 workers, began in March. The workers’ employment contracts remain in effect, but wages are not fully paid. Nissan is using a U.K. government grant for the furlough scheme.

Nissan is adjusting the length of the furloughs and the number of workers affected according to the availability of components.

“We are adjusting production, and the number of workers daily, due to the semiconductor shortage,” a spokesperson said.

“There were times when staff were in work, but there had been some disruption this month and things are not back to normal. Since the current situation on semiconductors is fluid, we expect more disruption to come.”

The U.K. factory is the automaker’s biggest production base in Europe and can turn out 550,000 cars a year, making it the biggest auto factory in the country. It produced about 250,000 cars in the fiscal year ended March, including the Leaf electric vehicle and the Juke sport utility vehicle. Nissan’s output totaled 3.62 million cars worldwide that year.

Global carmakers have been forced to cut production in response to the lack of semiconductors. Japanese carmakers Nissan and Honda, and Germany’s Volkswagen, have suspended operations at various plants since January. GM has temporarily laid off thousands of workers at factories in the U.S., Canada and Brazil.

Global car sales were hit by the COVID-19 pandemic in 2020. Cutting back production in the face of recovering demand is further weighing on automakers’ earnings. Nissan in February forecast a loss of 530 billion yen ($4.9 billion) for fiscal year that ended in March.

The outlook for production remains cloudy, as the chip shortage is expected to take some time to ease. Several semiconductor plants were halted by blackouts in the U.S. state of Texas in February. A fire at a Renesas Electronics factory in Japan in March also squeezed supplies.

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