What is an “American” car? That’s become increasingly difficult to define in an era when most major international automakers operate at least one U.S. assembly plant – while cars bearing a Detroit nameplate might come from a plant in Korea.
With much of the design and engineering work done in the U.S. – and 98% of its content supplied by North American suppliers, Nissan insists the 2013 Altima is about as American as you can get.
“We’ve been moving in this direction for some time,” said Nissan Americas Vice Chairman Bill Krueger following the “Job One” rollout of the first saleable Altima.
Nissan, he noted, has been steadily increasing the number of products it builds in the U.S. and Mexico, in large part driven by the strong yen. And “We’ve been localizing (the parts used in those vehicles) at a faster rate,” he said.
Nissan officials could not break down the 98% figure, however, to say specifically what percentage of parts specifically came from the U.S. as opposed to suppliers in Canada or Mexico. But Krueger noted that the automaker is trying to get as many suppliers as possible to base operations in the region surrounding Nissan’s assembly plants in Smyrna, Tennessee and Canton, Mississippi.
That makes it easier to run a Just-in-Time operations, where there is minimal inventory at the plants. It also offers the opportunity to adopt a Just-in-Sequence operation where parts roll off the supplier’s truck in the exact sequence they are needed on the assembly line. That minimizes the risk of error when, for example, you are using a variety of different colored parts and components.
Krueger said the Japanese automaker has accelerated efforts to purchase more material in the Americas as the yen has stabilized at around 80 to the U.S. dollar. At that rate it makes little sense to ship parts from Japan.
The deadly tsunami that struck Japan last March only served to accelerate the process, Krueger said, by disrupting traditional supply lines.
Nissan has gone a step further than most other manufacturers by asking several key suppliers to set up shop right inside the company’s mile-long assembly complex in Smyrna. So, employees from partsmakers such as Calsonic do final work on components such as headliners and front end modules right next to Nissan employees who will fit those parts onto vehicles like the new Altima.
The outside suppliers, while operating inside the Smyrna factory, maintain their own, separate wage and benefits structure just as if they were working from another building, according to Susan Brennan, the vice president of manufacturing for Nissan Smyrna.
As part of the effort to localize content, Nissan has gradually increased the size of its purchasing staff – which is based in Farmington HIlls, Michigan rather than at Nissan headquarters near Nashville — to 75.
Nissan is rapidly expanding other parts of it North American operations. Most of the design work and a significant part of the engineering for the fifth generation Altima was handled at facilities in Michigan, California and Tennessee. And by summer the new sedan will be produced both in Tennessee and at the Canton plant, where Nissan plans to expand capacity by 20%.
With the launch of Leaf battery car production in Smyrna late this year Nissan will be producing roughly a dozen different products in the U.S., with more likely to be added.
The maker is also investing heavily in Mexico where it currently operates two assembly plants and will spend over $1 billion to add another manufacturing complex in Aguas Calientes.
The launch of Altima production at Smyrna marks the introduction of the first of five new products the maker will be rolling out over the next 15 months – and will arguably be the most important. Nissan has openly expressed its desire to become number one in the midsize segment with the new model, Krueger telling TheDetroitBureau.com, “Nobody wants to be the silver medalist.”
Whether consumers will be swayed by Nissan’s heavy reliance on U.S. workers and North American-sourced parts remains to be seen.
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