Nissan and Tennessee: A 30-year partnership unlike any other in North America's automotive sector
By Mike Randle
Texas, Kentucky and Tennessee are the only states in the Southern Automotive Corridor (SAC) that are home to both foreign and domestic vehicle assembly plants. Texas has GM and Toyota. Kentucky boasts Ford, GM and Toyota. Tennessee is a mammoth manufacturing base for Nissan, Volkswagen and GM.
While Toyota operates dual headquarter operations in California and Kentucky, Nissan's only North American headquarters is solidly planted just south of Nashville in Franklin, Tenn. The Japanese automaker announced it was relocating its North American headquarters from Southern California to Nashville in 2005 and made the move official when it opened its shiny, metallic, 10-story, 450,000-square-foot building to employees in late 2010.
"The board of Nissan decided to relocate our North American headquarters, and we're coming to Tennessee," Nissan CEO Carlos Ghosn said at a news conference at the Tennessee state Capitol attended by former Gov. Phil Bredesen and other Tennessee officials in November of 2005. The story was published by the Associated Press and was carried by many news outlets, including The Washington Post. Many of the former California employees now work in Music City.
In the AP story, Ghosn added, "The costs of doing business in Southern California are much higher than the costs of doing business in Tennessee." The governor of California then was Arnold Schwarzenegger. He said in the piece, "I wanted to find out, 'What is it that you need to stop you from moving to another state?' And they said 'Look, the things we need are so overwhelming that you can never provide them because you would need to change a tremendous amount of laws and so on.' So it's just, the other place, the other state (Tennessee), is just so much more completive," Schwarzenegger said.
The Nissan Americas headquarters in Nashville certainly isn't chump change with over 1,300 employees housed there. But it pales in comparison to what the Japanese automaker has going on right down the road in Smyrna, Tenn.
With production starting in 1983, the Nissan plant is the South's oldest foreign-owned facility. It is also one of the largest, with over 7,000 employees producing approximately 42,000 vehicles a month. Only Toyota's plant in Georgetown, Ky., produces more vehicle units than Nissan's Smyrna plant in the Southern Auto Corridor, with Hyundai's Montgomery, Ala., facility in third place.
The sprawling Smyrna facility, which celebrated its 30th anniversary in July, has a lot going on. The factory produces six models; the Infiniti JX, Nissan Pathfinder, Rogue, Altima, Maxima and the all-electric Leaf model. In addition, lithium-ion battery modules for the Leaf are made on site in Smyrna. The other assembly plant owned by Nissan in the SAC is in Canton, Miss.
Over in Decherd, Tenn., Nissan operates its powertrain assembly plant, which began production in 1997. Today, the plant manufactures all of the engines for the complete lineup of Nissan and Infiniti vehicles produced in the United States. The Decherd plant also forges crankshafts and cylinder block casting.
In August, I met with Janet Miller, Chief Economic Development Officer for the Nashville Area Chamber of Commerce to discuss Nissan's economic effect on not only the Nashville region, but Tennessee as a whole. "Mike, the location of Nissan's automotive plant to Middle Tennessee 30 years ago truly has been one of the biggest economy-changers in the history of the State of Tennessee. Since that initial investment, the company has created thousands of jobs, made hundreds of millions of dollars in investments, and altered the corporate headquarters landscape of the Nashville area through the relocation of their headquarters. Middle Tennessee and Nashville love Nissan," Miller said. With 6,600 employees, Nissan is the Nashville region's third-largest employer.
Tennessee's automotive industry at a glance
- In addition to Nissan's facilities, General Motors operates a massive assembly and engine manufacturing plant in Spring Hill, Tenn. Currently the plant houses over 2,000 workers. In August, GM announced it would invest $167 million and add as many as 1,200 workers to the facility to produce the Chevrolet Equinox and one other model. Assembly of the Cadillac SRX is expected to be added to the Spring Hill factory. In addition to the assembly lines at Spring Hill, GM has invested $515 million in engine operations over the past two years. The assembly lines at the plant were shut down and 2,000 workers were laid off prior to GM's 2009 bankruptcy. The assembly lines were started up again in 2011.
- Volkswagen operates its only U.S. plant in Chattanooga, Tenn. The facility serves as a blueprint for new VW facilities worldwide for environmental and production efficiency. In fact, Volkswagen's Chattanooga plant is the world's only LEED certified Platinum factory. The facility houses approximately 3,000 workers.
- There are over 900 automotive manufacturers and suppliers located throughout the state of Tennessee. I visited one of the more interesting supplier facilities in August. The Magnetti Marelli Automotive Lighting plant in Pulaski, Tenn., is Italian-owned and tied to the automaker Fiat. The Magnetti Marelli plant, which was inaugurated in June with a visit from Sergio Marchionne, CEO of Fiat S.p.A and Chairman and CEO of Chrysler Group LLC, manufactures headlamps and rear lights for a variety of automakers. The plant is expected to house 800 workers at full production.
- Approximately 116,000 Tennesseans are employed in the automotive manufacturing sector in the state.
- A third of all manufacturing jobs in Tennessee support the automotive industry.
- Tennessee has invested over $80 million in workforce training in the automotive industry in the past seven years.
- The annual payroll for Tennessee's automotive industry is approximately $6.5 billion annually.
- Thirty-two percent of Tennessee's total employment growth is automotive related.