Nissan Motor Philippines, Inc. has decided to put an end to local operations of one of its car makes starting March 1, 2021, following the expiration of its assembly contract with Univation Motor Philippines, Inc. (UMPI).
The announcement came a day after Makati Shangri-La, the Philippines foremost business hotel in Makati business district along Ayala Avenue, announced the temporary closure of its 30-year operation due to uncertain business conditions effective February 1, 2021.
Meanwhile, the labor group Trade Union Congress of the Philippines said it would extend legal support to all workers of Nissan and Shangri-La Hotel who shut down their operations due to the pandemic.
“We share the loss and disappointment of employees of Nissan and Shangri-La Hotel who will be terminated from their jobs following management’s decision to retrench them,” TUCP spokesperson Alan Tanjusay said in a statement.
“Though we are saddened by the news of their unemployment, we hope that they will be able to come to terms with the management and get the best separation benefits they can get out of the years of service they rendered to the company. Be that as it may, we extend our legal support if the employees are in need to seek redress at our labor courts against employers who may ignore their lawful separation benefits,” he said.
According to Nissan, the decision was aligned with company plans to optimize operations in the ASEAN region, as part of the Nissan NEXT transformation plan.
“We were informed that UMPI will remain active in the Philippines and continue its other business operations in the country. The well-being of employees is the highest priority. Nissan is coordinating with UMPI to ensure a smooth transition,” the company said in a statement.
Nissan assured consumers that the company remains committed to its investments in the Philippines. It will continue to contribute to the growth of the Philippine automotive industry through its innovative products and excellent services, as well as its dealer expansion nationwide.
“Nissan’s strategy in the Philippines is to keep the customer at the heart of our business, and focus on strengthening the fundamentals of product, service, customer experience, and people. Our customer-centric approach guides our product and service offerings, as well as network expansion,” Nissan said.
Nissan forwarded its intention to close the assembly of the Nissan Almera model to the Department of Trade and Industry (DTI) on January 20, 2021.
“The announcement of Nissan to close their assembly operations in the country is regrettable, as these developments all the more demonstrate the critical situation of the local motor vehicle industry. Thus, the provisional safeguard measures need to be immediately put in place to protect the domestic industry from further serious injury,” said Trade secretary Ramon Lopez.
Globally, Nissan had already closed plants across Europe, US and developing countries and had laid-off approximately 42,500 workers globally.
Moving forward, it plans to further cut its global production capacity by 20 percent as well as its number of models offered to the market.
In the Philippines, Nissan Almera’s sales of around 4,500 represents just 1 percent of the total vehicle market and its assembly activity employs 133 workers. Introduced in the country in 2011, the current 3rd generation Almera had likewise over-extended its model life cycle, the DTI noted.
DTI said the closure was anticipated since Nissan has intimated that they already contemplated on closing since 2020 given weaker volume sales and low market share of the Almera. Nissan major sales came from imported pick-ups and sport utility vehicles (SUVs).
Nissan, however, reassured DTI that the 133 workers will be provided reasonable compensation packages and that only assembly workers are affected, as operations of their marketing and distribution network will continue – selling units imported mainly from Thailand and Japan.
Moreover, the Department of Labor and Employment and the DTI regional offices will collaborate in providing affected workers with manufacturing jobs.
“The stoppage of Almera’s assembly operations, following closely that of Honda and Isuzu, only highlights that the local auto assembly industry is critically impacted by the surge in imports and will thus benefit from the time-bound safeguard duty,” Lopez said.
He emphasized the need for the provisional safeguard measures on automotives following the news of the closure of operations of Nissan Philippines.
The closure of Nissan followed a spate of shutdown of major Philippine-based companies like automotive firm Honda Cars Philippines, Inc., the decommissioning of Petron Corporation’s Bataan Refinery and Shell Philippines’ Tabangao Refinery.