TOKYO - Nissan Motor Co. Ltd. faces a potential shortfall in its pension funding of about $4.8 billion.
The size of the pension problem is yet another indicator of the depth of Nissan's financial woes. As of March 31, 1998, the automaker was showing debt of $35.8 billion.
Nissan is not alone in facing an underfunded pension program. Toyota Motor Corp. has said its pension plan is underfunded by about $2.5 billion. Other major companies also have admitted to having underfunded pension plans.
The size of Nissan's shortfall was revealed by Renault SA officials in recent meetings with New York stock analysts. Renault uncovered the situation while examining Nissan's books before taking a 35 percent stake in the Japanese automaker last month.
Under new accounting rules that are taking effect in Japan, Nissan will be required to make public the amount of the shortfall in its earnings statements for the fiscal year that began April 1. Moreover, Nissan will have to subtract the funding gap from its consolidated pretax profit this year.
Nissan spokesman Masataka Saito said that the actual shortfall could vary, in part because of changes in pension rules that the Japanese government is mulling.
The Japanese government may allow companies to put some of their equity holdings into their pension funds or to adopt revised contribution plans similar to the 401(k) plans common in the United States.
Either action would shrink the size of the shortfall. So would higher returns from Nissan's pension investments, which may come about now that the Tokyo stock market is showing new signs of life. By next year, Saito said, 'It should be considerably reduced, we think.'