Mississippi Enters Second Decade of Assembly
By Mike Randle
In November of 2000, the center of the Southern Auto Corridor jogged a little west. That year, Nissan picked a site near the capital city of Jackson, Miss., for its second assembly facility in the Southern Auto Corridor.
In May of this year, Nissan and its workforce celebrated 10 years of vehicle production at its massive plant in Canton, Miss. I was invited to the official opening of the facility and later that day did a show on public television in Jackson where I was asked, "Mike, did Mississippi hit a home run with Nissan?" My response was, "No they did not." After a few seconds of silence, I said, "Mississippi hit a grand slam with Nissan."
Nissan rolled Job One -- a gold Quest minivan -- off the assembly line in Canton on May 27, 2003, and the era of automotive assembly in Mississippi began. Now, a little more than a decade later, the Japanese automaker has manufactured approximately 2.5 million vehicles at its Canton facilities where about 5,200 workers are housed.
Today, the plant assembles an astounding number of models; the Titan, Armada, Frontier, Xterra, Altima, Sentra and the commercial van, the NV. Next year team members at the facility will build the popular Nissan crossover Murano model for the first time.
Since breaking ground on its Canton plant in 2000, Nissan has invested over $2.5 billion in its Mississippi operations, and since opening in 2003 has paid an estimated $2.5 billion in wages at the facility. Last year it announced the addition of the Sentra model and 1,000 new jobs at the plant.
This summer Nissan made the decision to build a supplier park near the company's Mississippi plant. The $50 million investment will create 800 new jobs at the Japanese automaker's first North American supplier park.
"That game-changing win for Mississippi just a little more than a decade ago, when Nissan announced it would call Canton home, continues to pay enormous dividends for our state," said Brent Christensen, Executive Director of the Mississippi Development Authority. "Simply put, that announcement put us on the map for automakers.
"OEMs and their suppliers are now found throughout the state, and Nissan's first-ever supplier park will take the 'just in time' delivery concept to a whole new level. And Yokohama's announcement earlier this year that it will build a new plant in Mississippi shows that the momentum continues," Christensen said. Yokohama announced in April it is building a $300 million, 500-employee plant in West Point, Miss., that could potentially grow to 2,000 jobs.
In 2007, Mississippi landed another Japanese automaker when Toyota picked a site near Tupelo in Blue Springs, Miss., over sites in Marion, Ark., and Chattanooga, Tenn. The $800 million plant is Toyota's 10th U.S. assembly operation. After delaying production for a couple of years during the Great Recession, Toyota now employs about 2,000 workers at the northeast Mississippi plant that produces 150,000 Corolla models each year.
There is great anticipation that Toyota is close to expanding its Mississippi facility. The plant is one of only two in the Southern Auto Corridor operating single assembly lines. The other is Volkswagen's plant in Chattanooga that builds the Passat model exclusively.
In addition to Nissan and Toyota's major assembly plants in the state, Mississippi is also home to Belleview, Wash.-based PACCAR, a manufacturer of a variety of light-, medium- and heavy-duty trucks with brand names such as Peterbilt and Kenworth. The company builds diesel truck engines at its $300 million plant in Lowndes County, Miss.
So, in just 10 years, Mississippi has established a solid foothold in North America's automotive industry. The state is one of only five in the Southern Automotive Corridor with two or more automotive assembly plants. While that is certainly impressive, what has been built behind the scenes in the state to support transportation equipment manufacturers in Mississippi is just as impressive. Here are a few examples of that automotive-related infrastructure that supports the industry:
CAVS - Center for Advanced Vehicular Systems
The Center for Advanced Vehicular Systems (CAVS) at Mississippi State University in Starkville is an interdisciplinary center comprised of research, engineering design and development and technology transfer teams for industry and government partners. Under the auspices of MSU's Bagley College of Engineering and the state of Mississippi, CAVS was created to provide research and development of solutions for international automotive manufacturers such as Nissan North America and Toyota.
The $9 million, 45,000-square-foot CAVS facility draws on the university's longstanding high-performance computing expertise to develop exceptional manufacturing methods. The goal of CAVS is to accentuate the production of high-quality vehicles with advanced features while reducing time-to-market and production costs.
CAVS is located in the Thad Cochran Research, Technology and Economic Development Research Park adjacent to the MSU campus. A companion facility, the CAVS Extension Center, is located near Nissan's assembly plant in Canton.
The Haley Barbour Center for Manufacturing Excellence
The University of Mississippi in Oxford has created the Haley Barbour Center for Manufacturing Excellence (CME) with the support of the state of Mississippi in association with Toyota and other manufacturers in the state. The CME offers manufacturing training to undergraduate students, a program that is one of the most unique in the nation.
The CME offer cross-disciplinary programs from the School of Engineering, the School of Business Administration and the School of Accountancy slanted toward fundamental lean manufacturing and production techniques, as well as management, human resources and accounting.
The Center also works with the University of Mississippi International Studies Department to provide students opportunities to study manufacturing techniques in Japan and other countries. CME also offers a certification for lean manufacturing through courses like supply chain flow, lean accounting and other "kaizen" (Japanese for "improvement") activities.
Mississippi Polymer Institute
The Mississippi Polymer Institute (MPI) was established in 1993 with a goal of growing high-tech polymer and polymer-related industries in the state. MPI serves as the industrial outreach arm of the School of Polymers and High Performance Materials at the University of Southern Mississippi in Hattiesburg.
MPI has played a key role in growing the state's multibillion-dollar-per-year, high-tech polymer industry -- including all aspects of polymers used in the automotive industry -- and has directly assisted in the creation of thousands of jobs in Mississippi.
While the primary focus is supporting growth of high-tech businesses within Mississippi, MPI performs contracted work for companies worldwide.
Toyota and Northeast Mississippi
In Northeast Mississippi, Toyota is assembling the redesigned 2014 Corolla model. "They began producing the 2014 model in July," David Rumbarger said. Rumbarger is President and CEO of Tupelo-based Community Development Foundation (CDF). The economic development organization is regarded as one of the finest in the South, with legendary practitioner Harry Martin running the agency for 50 years.
"The new Corolla model is now in showrooms and it looks great," Rumbarger said. "The 2014 model has 17 trim lines compared to just five for the last model. The Corolla has been a staple for Toyota for 40 years."
We asked Rumbarger how Toyota has changed the Tupelo region, which has deep roots in traditional Southern industries such as furniture and textiles. "The community's capacity is growing. Not just in automotive, but in all aspects. Our downtown has been revitalized with more than $70 million invested. We have new merchants, restaurants and other businesses that have opened since Toyota opened its plant. And in terms of available industrial real estate in the area, we only have two buildings of any size available right now," Rumbarger said.
While Toyota does not make public its records for production quality at its 10 U.S. plants, SB&D has heard from a number of people in the industry that the Japanese automaker is quite pleased with the quality of the product coming out of its Mississippi plant.
Prior to Toyota choosing Northeast Mississippi, Rumbarger and other leaders in Mississippi, such as former TVA executive Glenn McCullough, Jr., put together the "PUL Alliance" (pronounced "pull"). That alliance represented the effort by Pontotoc, Union and Lee counties in Northeast Mississippi to land an automaker on a 1,700-plus-acre site called the "Wellspring Project."
What is Toyota's method of building cars that they so proudly claim? It is called the "pull" system. Toyota is frequently used as an example of "pull" production, as opposed to "push" production. With push production, products are pushed through the channel, from the production side up to the retailer. In an automaker's case, that would be the dealer. The manufacturer sets production at a level in accord with historical ordering patterns from retailers. The "push" manufacturing supply chain system can result in overstocking or bottlenecks.
On the other hand, the "pull" strategy is demand driven rather than based on a forecast of sales. Essentially, every car Toyota builds is already sold. The "pull" strategy is based on a Kanban system that was developed by Taiichi Ohno at Toyota. Kanban is one method of a manufacturing scheduling system to control logistical chain from a production point of view. It is part of Toyota "lean" and "just-in-time" production strategy. The fact that CDF's group trying to attract a Toyota plant was named the PUL Alliance did not go unnoticed.
Mississippi's workforce turned the tide for Toyota
A cancelled meeting seven years ago turned the tide in favor of Tupelo, Miss., and started Toyota's site search on a course that led to Mississippi winning the $1.3 billion plant. A last minute emergency forced Dennis Cuneo, Toyota's lead site search executive, to disappoint the two men who had flown to New York in hope of convincing him to seriously consider the 1,730-acre Wellspring megasite in northeast Mississippi.
"At the time, Tupelo wasn't even on our radar," said Cuneo in a story published in Southern Business & Development in the Summer 2007 issue. In fact, a different Mississippi site suggested by state officials was on his list of potential sites. It was a call from former TVA executive director Glenn McCullough, Jr., a Tupelo native, that got Cuneo to agree to the aborted New York meeting.
"Glenn called me in April and said he and David Rumbarger wanted to come up to New York and make a pitch," Cuneo said. They didn't get to pitch their site, but the cancelled meeting resulted in something better.
"Because I couldn't meet with them," Cuneo said, "I promised I'd come to Tupelo in July." He did, on July 17, 2006, and was taken to some of the area's upholstered furniture factories and the Cooper Tire & Rubber plant. He saw hardworking people doing tough factory jobs, and heard plant managers praise their employees' work ethic. "I left impressed by the workers," he said.
"When I went back to New York, I asked our human resources people to do a deep-dive on Tupelo. I told them there may be something in Tupelo for us," Cuneo recalled. When the researchers came back with their findings, they told Cuneo that the workforce in the Tupelo area might be one of the best they'd ever seen.
So, as Mississippi enters its second decade of automotive assembly, the future looks bright. Nissan and Toyota, two growing Japanese automakers, have found great success in the Magnolia State. "Our biggest advantage is our people," Brent Christensen said. "We hear it all the time from companies that locate and expand here. They find the kind of hard-working problem solvers that fit perfectly on the production floor."