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Mississippi bidders face uncertainty with proposals

Nissan suppliers: decided or not?

CANTON — Hoping to procure Nissan supplier business while bracing to lose key employees to higher-paying jobs at the Nissan plant being build in Madison County has Mississippi manufacturers doing the two-step. Compounding the situation: mixed signals from Nissan. Will the corporation give most of its supply business to existing Nissan suppliers outside Mississippi?

“It hasn’t been determined where these parts are going to come from,” said Gene Higdon, general manager of Nissan Motor Corp. Distribution — Memphis Division. “We have all these suppliers and all …”

But Delphi Packard Electric, with plants in Brookhaven and Clinton, won’t be a supplier.

The company’s bid to supply automotive wiring harnesses was unsuccessful, said Larry V. Johnson, director of Mississippi, Alabama and South Carolina operations for Delphi Automotive Systems and Packard Electric.

“Delphi Packard Electric pursued a potential supplier relationship with Nissan in 2000,” Johnson said. “Nissan indicated it would continue to use its current source for wiring harnesses — which is part of its integrated supplier family. Although we were not successful in this endeavor, Delphi Packard Electric will continue to look for opportunities to be the supplier of choice for Nissan of Mississippi.”

Allen Roye, plant manager at Federal-Mogul Corp. in Pontotoc, said even though the Lee County plant will soon close, investors are trying to keep part of it operational, in the hopes of capturing business from Nissan.

“We’ve got the ability to make several different kinds of chassis products and metal stamp products,” Roye said. “I haven’t heard anything from Nissan about our proposal yet and I don’t know when we might.”

Babs Hardy, president of Yazoo Industries in Yazoo City, said its parent company, Hood Cable Co., made an unsuccessful bid to become a Nissan supplier of automotive electrical wiring and harness sets, but was told that tier one and tier two suppliers had already been selected. (Hood Cable Co. is also the parent company for Hattiesburg Cable, Columbia Cable and Lumberton Cable.)

“(Nissan) had an open meeting with all potential suppliers and said that even though those suppliers had been chosen, it didn’t leave us out, and that down the road, we might be able to provide ripple support for those tier one and two suppliers,” Hardy said. “I understand that will be announced at a later date.”

Buzz Canup, Ph.D., project director for the Nissan Implementation Team of the MMEIA, said Nissan has not directly indicated how many or what type of suppliers will be needed, nor has a schedule been provided.

“Nissan is still in discussions and negotiations with their suppliers concerning prices, locations of their manufacturers and transportation and their ‘just-in-time’ delivery requirements,” he said. “To my knowledge, they haven’t announced any of their suppliers yet. They are working closely with MDA to help identify potential suppliers.”

Existing Nissan suppliers have been looking at various sites in the state “to identify where they might locate,” Canup said.

“Some of the suppliers are going to need to be operational before Nissan begins production, because they’re going to need to do trial runs,” he said. “This is going to start coming out pretty quickly, I think.”

Canup said the international automaker has indicated it wants “to optimize the number of Mississippi companies they work with.”

From 1991 to 1996, Nissan’s commitment to building vehicles in North America with locally-made parts increased significantly. In 1991, parts procurement totaled slightly more than $1 billion. By 1996, that number topped $4 billion. Recent figures were unavailable at press time.

“Everything Nissan buys goes to a purchasing group, so obviously that group uses whatever means to get the best price,” Canup said.

“I think the key point is that right now, Nissan is still actively engaged in discussions with their tier one suppliers. These negotiations take time and there’s an awful lot of due diligence that needs to be performed by the suppliers and by Nissan to be sure that price, location and delivery all match. It’s complicated, so it’s not surprising we don’t know who the suppliers are yet. A lot of other types of suppliers and service providers will probably not be decided on until a year or two downstream,” Canup said.

That would place the timeline around the same time Nissan cranks up operations with its first wave of employees.

“Sure, I’m going to lose some employees at all plant locations, but there are also other businesses that have already announced closings, such as Yazoo Uniform and a downsizing at Mississippi Chemical, that will provide a good draw of good workers,” Hardy said. Mark Leggett, director of governmental affairs for the 1,800-member Mississippi Manufacturers Association, said manufacturers are definitely concerned about losing skilled employees.

“In a tight labor market, when someone comes in like this, you worry about losing people you need,” he said. “The problem becomes finding a replacement. What about upgrading work skills to move people into those vacated positions?”

John Baas, director of industrial relations for MMA, said Nissan recently joined the association and “pledged not to take all of anybody’s good people.”

“They’ve asked companies to tell them if they are taking too many good people to the point that it’s hurting them … and Nissan has said they wouldn’t hire any more workers from those companies,” Baas said. “We don’t have that same pledge from the suppliers coming in and we’re just concerned that there could be a shortage of skilled people. We were very concerned during the last legislative session that the workforce training funds would not be adequate. I know the Nissan training fund money was appropriated back in the summer but there are no guarantees of money for training to replace key employees lost to Nissan. We feel that the key is going to be local groups like the Workforce Investment Council, the district workforce councils and local groups of business people getting together and deciding what skills they need to have people trained in and trying to come up with common skill areas and getting the local high schools and community colleges to get people trained in those areas.”

Contact MBJ contributing writer Lynne Wilbanks Jeter at lwjeter@yahoo.com or (601) 853-3967.

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