Nissan to cut 1,200 jobs at Sunderland plant

By Paul Sandle

LONDON (Reuters) - Japanese car maker Nissan is cutting 1,200 jobs at its Sunderland plant in response to a dramatic decline in demand that has seen sales fall upwards of 20 percent in recent months.

The news came after the Bank of England cut interest rates to a record low of 1.5 percent on Thursday as it and the government battle to prevent Britain falling further into a recession that has cost thousands of jobs.

Nissan had already reduced production at the plant, Britain's largest car producer and exporter. It said it would cut 800 permanent workers and would not renew the contracts of 400 temporary staff. It wants voluntary redundancies.

"Like all manufacturers, Sunderland Plant is currently operating in extraordinary circumstances not of our making," Trevor Mann, the company's senior vice president for manufacturing, Europe, said.

"It is essential we take the right action now to ensure we are in a strong and viable position once business conditions return to normal," he said.

British consumers, in common with buyers around the world, are steering clear of car showrooms as easy credit dries up and worries about the economic downturn weigh.

Trade union Unite said the job losses were devastating news for workers and their families. British Business Secretary Peter Mandelson said he was determined to ensure car making remained an important part of Britain's manufacturing industry.

"Unite will be doing everything possible to minimise compulsory redundancies and it is absolutely crucial that these workers' skills are not lost," Unite joint general secretary Derek Simpson said in a statement. "The economy will improve and when it does Nissan will need these workers again."