Teamwork helped land ‘The Deal of the Century’
by Lynne W. Jeter
Published: June 2,2003
It was Mississippi’s best-kept secret. And it marked undoubtedly the state’s best collaborative effort between public and private entities to land what The New York Times called “the great economic prize of 2000.”
“Nissan. Mississippi made. Sounds good to me,” said U.S. Sen. Trent Lott. “It’s a great credit to the state to get this caliber of an international automotive manufacturer into Mississippi. The head of Nissan, Carlos Ghosn, is acknowledged as one of the most outstanding automobile manufacturing leaders in the world and is credited for turning around Nissan. The company had serious debt problems as recently as 1999 and is now debt-free. Soon, Nissan will be producing really fine quality automobiles in Mississippi.”
Last month, Nissan Motor Co., Japan’s third-largest automaker, announced that its profit jumped by one-third in the fiscal year ended March 31, confirming the fact that the once-troubled company has secured a place among the world’s most profitable automakers. Thanks primarily to improved sales worldwide and cost-cutting measures, Nissan expects a record net profit of $4.11 billion for the year and is on track to surpass Honda Motor Co. as Japan’s second most profitable automaker, behind Toyota Motor Corp. Last year, Nissan’s earnings outpaced those of much larger rivals General Motors Corp. and Ford Motor Corp.
“Even though 2003 looks to be volatile and uncertain, we think we’re going to cross the mark (of sales) of three million cars,” said Ghosn, who was named Man of the Year by Automobile Magazine in January 2002. “This is the first year that there is a real and substantial increase in net revenue.”
When Nissan senior officials initially met with Lott in June 2000, they were very candid about their requirements, said Lott.
“They said everybody’s got an even shot and they outlined what they were looking for in Mississippi and what they hoped Missis-sippi would be willing to do,” he said. “They were interested in a couple of things that had a federal impact — education funds for training, roads programs on the site including access to the plant facility, as well as an enterprise zone designation. I assured them we could help in those areas. There were also some things Mississippi needed to do to upgrade and make the state competitive in terms of laws on the books. State lawmakers made changes and produced the Advantage Mississippi law. It’s been amazing to watch how quickly everyone worked together and to think that this week, we’ll actually have the ribbon cutting, getting the facility in full operation.”
U.S. Sen. Thad Cochran attributed the project’s success to “the willing and enthusiastic cooperation of federal, state and local elected officials.”
In his inaugural State of the State address in 2000, Gov. Ronnie Musgrove talked about what could be done in Mississippi, and for Mississippi, “if we worked together to capitalize on our energy and our potential.”
“My office worked closely with the Legislature, the Mississippi Development Authority (MDA) and other economic development experts to pass the Advantage Mississippi Initiative,” he said. “The Nissan project is a great example of what can be done. We worked with the Legislature, our congressional delegation, MDA and so many others, and crossed a bridge built on cooperation and communication.”
In his book “Turnaround: How Carlos Ghosn Rescued Nissan,” David Magee wrote: “The catch was that Nissan, in its hyper-speed mode, needed the state to have its incentive package, land available and workforce demographics put together in just a handful of months. The typical site selection process for a plant the size of the one Nissan was planning to build is 12 to 18 months, but Ghosn said it had to be done in roughly six months to meet production demands. Nissan had no time to waste. Musgrove obliged, saying Mississippi would get it done, ‘no ifs, ands, or buts.’”
Jay Moon, president of the Mississippi Manufacturers Association, said it was “the best creative collaborative effort ever witnessed.”
Moon, who was the senior project director for MDA during the Nissan recruitment phase, said Nissan had various teams — human resources, transportation and site selection. Mississippi assembled matching teams comprised of public and private business leaders to review concerns, issues and needs. Each team operated independently toward a common goal.
“Every time there was an issue, somebody in the group was able to figure out a way to answer to Nissan’s needs,” said Moon. “Anytime we called, people asked, ‘What can we do to help?’ These scenarios happened over and over again. And it keeps creating ripples in a pond with benefits that go out across the state, particularly in manufacturing. That is a great part of the story.”
For example, there was a hiccup with rail service, said Moon.
“We had a big cost differential with Nissan using our rail line, Canadian National, versus Opelika’s, which uses Norfolk Southern,” he said. “Nissan called us with the cost differential, that it was going to cost more for the company to move the product by rail out of Canton than out of Opelika, and asked us, ‘What are you going to do about it?’ so we got together with the team again and with Canadian National. They were able to work out some breaks in their rates and we were able to overcome that obstacle.”
Because assembly lines are very alignment sensitive, Nissan officials were very concerned about a common subsoil malady in the south — pesky Yazoo clay, said Buzz Canup, president of Canup & Associates Inc. and project director for the Nissan implementation team.
“I told my guys, ‘Look, we’re on the edge of elimination if we don’t come up with an engineering solution that will not damage any of the foundations or structures,’” he said. “So we got our engineering team together and locked ourselves in a conference room until we hammered out an engineering solution.”
“Everyone’s commitment and dedication, unity and teamwork was seamless, and without a doubt, that closed the deal,” said Canup, who recalled the Sept. 21 meeting with Nissan officials, when the two finalists — Alabama for Opelika and Mississippi for Canton —made their closing presentations in Smyrna, Tenn.
“Opelika went first, from 9 a.m. to noon. Mississippi was second. We had three airplanes that 31 people flew to Smyrna that morning, everyone from the tax commission, MDOT, community colleges, local supervisors, MDA officials, the engineering team.”
The excitement — and pressure — builds
The Mississippi delegation held an emotionally-charged pep rally on the passenger bus en route to the Nissan plant, said MDA spokesperson Sherry Vance.
“It was like a sports team preparing for the biggest game of the year,” she said. “And it was only the biggest game in the history of Mississippi. Thousands of jobs and millions of dollars of investment by the company were at stake. The feeling among everyone was camaraderie and team spirit.”
Canup said the presentation had been rehearsed “over and over and over again.”
“And when we did the presentation, our core team of state leaders sat at the table and our support team waited in the lobby,” he said. “We’d bring them in one by one and they’d sit at the middle of the table. We were there to support them in case there were questions they couldn’t answer, but everybody did such an unbelievable, outstanding job. When our three hours were up, I told Emil Hassan and his team that we could close out the prese
ntation but that we had some other things to talk about and he said, ‘by all means, let’s discuss them,’ and let us go another two hours. Everybody on the team was focused and prepared. The whole attitude was, ‘We’re going to win this project.’ I was happy to be there. It was fantastic.”
You have my number
When Musgrove traveled to California in Octo
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