Nissan layoffs unrelated to Trump tariff proposal

"'Nissan just announced 9000 layoffs in Tennessee to avoid severe losses due to expected tariffs. Experts expect more,'" says a November 14, 2024 post on Facebook.

"Damn Tennessee I thought your guy was bringing us more jobs, what happened ?"

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Screenshot from Facebook taken November 19, 2024

Similar posts have spread across Facebook and other platforms, such as X and Threads, following Trump's November 5 election victory over Democratic Vice President Kamala Harris.

Trump has promised at least a 10 percent tariff on all imports and a higher level of 60 percent or more on Chinese goods, spooking American farmers who suffered from a trade war in his first administration and causing uncertainty for economists and market traders who worry such sweeping actions could prove inflationary. Trump claims the move will boost American manufacturing jobs.

While Nissan did announce 9,000 job cuts two days after Election Day, the move was unrelated to Trump's victory -- and there is no evidence the layoffs will be concentrated in Tennessee.

"The recent announcement of a potential global headcount reduction had nothing to do with any proposed actions by the incoming administration," Kyle Bazemore, the automobile manufacturer's US director of corporate communications, told AFP in a November 19 email.

"Nissan is taking measures to ensure we meet the needs of the market and our customers through the introduction of new products, ensuring competitiveness and offering the right value. These actions may include reducing global production capacity and headcount, including in China, to align production to market demand."

'A severe situation'

Nissan announced the layoffs as part of a November 7 earnings report showing a 93 percent plunge in net profit in the first half of the 2024 fiscal year, saying it had slashed its annual sales forecast and was taking urgent measures to tackle "a severe situation" (archived here).

The company -- a member of an automaker alliance with France's Renault and Japan's Mitsubishi -- has struggled to stand its ground in China as fast-growing electric vehicle firms backed by Beijing race ahead.

As part of its efforts to scale back costs, Nissan said in the release that it would "reduce its global workforce by 9,000."

The release does not mention Trump, tariffs or Tennessee, where it maintains its North American regional headquarters and two production facilities (archived here).

Asked if the 9,000 layoffs would all hit Tennessee, Bazemore said he could not provide a detailed plan but that the number is an "overall global target."

He told AFP the United States is a priority market where it expects an increase in sales from updated models such as the Nissan Kicks.

'Too early' for layoffs

Fielding a question during a November 7 earnings call about the potential impact of Trump-imposed tariffs on Nissan's business, CEO Makoto Uchida pointed to the company's production in Mexico -- with which the United States has a free trade agreement (archived here and here).

"We will be lobbying, and the direction of our medium- to long-term plans should remain, but we will conduct our business while monitoring the situation carefully," Uchida said.

Gary Hufbauer, nonresident senior fellow at the Peterson Institute for International Economics, told AFP the Nissan layoffs likely reflect other factors beyond Trump's election (archived here).

"It's too early for firms to lay off workers in anticipation of Trump tariffs," he said in a November 19 email. "There's a lot of uncertainty as to the magnitude, timing and exemptions."

Alan Deardorff, professor emeritus of international economics and public policy at the University of Michigan, agreed that Nissan's job cuts had to do with other problems (archived here).

"I can't really think of how Trump's proposed tariffs could cause this," he told AFP in a November 19 email.

"Trump's 10 percent or 20 percent tariff on all imports would matter for their other imported parts, but I can't imagine that would be enough to cause layoffs, especially as those tariffs will protect them as they do other US producers."

AFP has debunked other misinformation about US politics here.