Week of May 26, 2003
LOOKING FOR A PREVIOUS STORY? CHECK THE ARCHIVE.Gov. Musgrove:
Mississippi Won't Stop With Nissan
Political leaders expect Nissan to do for Mississippi what Mercedes did for Alabama
by RON STARNER, Director of Publications,
JACKSON, Miss. Mississippi Gov. Ronnie Musgrove won't say when his state will land the next big project after Nissan, but he issues this warning to competing states: "You will see our numbers soar."
The governor made that statement Tuesday just hours after opening the US$1.4 billion automotive assembly plant for Nissan North America in Canton north of Jackson.
Speaking to a roundtable of media representatives in the capital city, Musgrove said the success of Nissan paves the way for Mississippi to land other large-scale projects in the coming years.
"Every major executive of Nissan has commented on the incredibly talented workers they have found in Mississippi. This sends a loud signal to other companies," the governor said. "We will be in a position to market our state and region for large projects. This has literally put us on the radar screen. There is nothing like winning."
While the governor would not divulge company names, he did say: "We have more companies looking at us now than ever before."
Many of those firms will be automotive suppliers, but not all will be. Others will represent industries as diverse as supercomputing, space research and polymer science.
That is what a single automotive assembly plant can do. Musgrove knows, because he's seen it happen just across the state line in Alabama.
Ten years ago, when the town of Vance, Ala., landed the first-ever Mercedes-Benz factory to be built in the United States, the impact of that one decision forever changed the landscape of Alabama.
Today, Alabama stands at the center of the Southeast's automotive industry, with six major OEM plants and nearly 200 suppliers. Going from virtually zero automotive companies and little or no employment base in 1994, here is where Alabama stands today: 162 different automotive manufacturing plants; 30,180 automotive manufacturing employees; 35.4 million sq. ft. (3.3 million sq. m.) of plant floor space; and a total employment base (counting direct and indirect jobs) of 83,710.
Musgrove and other Mississippi leaders are banking on similar growth for their own state. "We are looking to a long and healthy partnership with Nissan and the mutual benefits that will result from that partnership," the governor said.
Big Numbers, Bigger ImpactAlready, those benefits are both tangible and substantial. The new Nissan factory in Canton represents $1.43 billion in new capital investment and 3.5 million sq. ft. (325,150 sq. m.) of floor space upon buildout. Some 5,300 full-time jobs will be created at full production, at which point the plant will produce 400,000 units per year.
Nissan President and CEO Carlos Ghosn proclaimed the new facility "Nissan's revival plant," alluding to his company's much-celebrated Revival Plan that turned the company around in less than 36 months.
"Three years ago, when Nissan's mere survival was in question, the Nissan Revival Plan provided the resources needed to build this plant. It's a different story today, and Canton is set to play a significant part in our company's future," Ghosn said at the opening ceremony in Canton. "The vehicles built in Canton will significantly expand our product lineup in North America."
In fact, Nissan is testing the limits of production flexibility by building five new models simultaneously at one plant: the full-size Nissan Pathfinder Armada sport-utility vehicle; full-size Infiniti SUV; full-size Nissan Titan pickup truck; the new 2004 Nissan Quest minivan; and the new 2004 Nissan Altima.
Ghosn also calls the Canton plant the most important step in his new business plan: Nissan 180. The three planks of that plan are to produce one million additional sales worldwide by the end of fiscal year 2004, achieve an 8-percent operating margin and achieve zero net automotive debt.
How quickly the Canton plant gets up to speed will go a long way toward meeting those corporate goals. The early returns, however, are positive.
Plant construction began in April 2001 on the 1,400-acre (567-hectare) site just 15 miles (24 km.) north of Jackson. Before the initial construction was completed, Nissan had announced plans to expand the plant by an additional $500 million and 1 million sq. ft. (92,900 sq. m.) so that the factory could also build the new Altima sedans.
The first vehicle to be produced at Canton rolled off the assembly line Tuesday: the all-new 2004 Nissan Quest. The redesigned minivan goes on sale at 1,000 Nissan dealers nationwide in July.
"The Quest is the first of the 10 all-new models Nissan will launch globally in fiscal year 2003," said Ghosn. "The Quest and the following new models made in Canton will make a significant contribution to our objective to sell 852,000 vehicles in the U.S. this year."
The Effect on MississippiWhile the total impact of Nissan on Mississippi can't be quantified, economists predict it will be substantial.
Before Nissan, about 30,000 Mississippi residents worked in automotive-related industry. That number is expected to rise sharply in coming years. By 2010, more than 26,000 additional high-wage jobs will be created in this sector, say industry experts. Hourly wage rates at the Nissan plant are projected to be anywhere from $13.25 for production workers to $18.50 for maintenance workers.
Many of those new jobs will be created at Nissan suppliers, 26 of whom have relocated to Mississippi since the Nissan plant announcement in late 2000. Robert Rohrlack, executive director of the Mississippi Development Authority, said Nissan's decision to expand the plant before it was even built served as confirmation of Mississippi's own revival.
"This announcement further increased our exposure nationwide and worldwide. It is further confirmation that Mississippi is a serious competitor," said Rohrlack. "Other industries are taking notice of the outstanding opportunities in Mississippi for their company and their employees."
Still, it is not easy to quantify what Nissan means to Mississippi. U.S. Sen. Thad Cochran, R-Miss., said, "The value to our state cannot be described in dollars and cents alone."
If what happened in Alabama is any indication of what's in store for Mississippi, Gov. Musgrove's bold predictions will ring true soon.
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