Hundreds of Nissan Workers to be Furloughed.
Hundreds of Nissan workers to be furloughed in Sunderland amid global parts crisis. The motor manufacturer has been hit by the worldwide shortage of semiconductors which are vital for car production.
Hundreds of workers at motor manufacturer Nissan are set to be furloughed after the business was hit by a worldwide parts shortage.
Around 750 staff at the Washington plant will be put on furlough leave for a week next week by Nissan as it temporarily suspends the late shift on production line two, which makes the Qashqai and Juke models.
The move comes as the firm has been hit by a shortage of semiconductors used in its cars’ electrical systems, caused by the Covid-19 pandemic.
Further suspensions of work at Nissan could follow if the shortage continues.
The chips are vital components for car makers, who need them for a variety of uses, including engine control units, brakes, infotainment systems and power steering.
Yet since last year there has been huge demand for computers, iPhones, Smart TVs, personal electronics gear and computer games, all of which use the semiconductor chips, as millions of people stay at home in lockdown during the pandemic – demand which has plummeted industry into the global shortage.
One consulting firm, AlixPartners, has even predicted the global auto industry will lose $60.6 billion (£42.9b) in sales this year because of the shortage.
Motor manufacturers including Honda and Mazda have already put in place temporary stoppages as a result.
A Nissan spokesman said: “A global shortage of semiconductors has affected parts procurement in the auto sector.
“Due to the shortage, Nissan will adjust production and take necessary actions to ensure recovery.”
The news comes a week after the firm unveiled its third generation Qashqai to the public, ahead of production which is set to start on Wearside this year.
Nissan said investment in the North East plant will reach £1 billion in the next five years as it unveiled the new model.
The Japanese car manufacturer has invested billions in the plant since it opened in the 1980s and says hundreds of millions will follow.
Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, has warned that car makers are “paddling furiously below the water” to maintain their supply chains.
He told MPs on the Commons Business, Energy and Industrial Strategy Committee that the movement of parts has been “difficult” since the end of the Brexit transition period.
Giving evidence to the committee, Mr Hawes said there was a “pervading sense of relief” within the automotive sector that an agreement on trade had been negotiated between the UK and the European Union.
He said: “We ended up, I think, with a deal that in many ways works for the sector, most obviously in the avoidance of tariffs and quotas which would have been a severe brake on the industry. However, it doesn’t mean zero cost. The industry is trying to manage its supply chains. We are integrated within the European, if not the global, industry, so the supply chains do stretch far and wide.
“All the industry is … I characterise it as paddling furiously below the water to keep things going.”