Revival plan designed to restore hope, profits, confidence
Published: May 31,2004
Even though the Nissan 180 Plan (N180) wasn’t exactly named for its tactics to turn around the company 180 degrees, from facing bankruptcy to becoming a world leader in the automotive industry, the Japanese automaker has done just that, especially with the help of the Canton assembly plant.
“The Canton plant is a very significant part of the N180 program simply because it’s now supporting three major segments we were not a player in prior to the Canton launch,” said Dan Gaudette, senior vice president for North American manufacturing and quality assurance for Nissan North America Inc. (NNA).
“The realization set in very early on that Nissan needed to be a player in all of the segments — Nissan had only participated in them to a limited degree — for us to realize the continuation of growth certainly in the future,” he said. “The Canton plant allowed us to continue to expand into markets where we weren’t a partner, and that includes the full-size market, which is the bread-and-butter of the truck segment. It really reflects the general spirit of the country as a whole. The largest segments of truck sales revolve around the South and Southeast. It made good sense to consider that as part of the decision process of choosing Canton.”
The Canton plant was a key piece of the puzzle for Nissan president and CEO Carlos Ghosn, who was promoted to company COO on June 25, 1999, then president and COO on June 20, 2000, and finally to his current status on June 21, 2001.
While COO, Ghosn initiated a two-phase quest for world automotive excellence through the Nissan Revival Plan (NRP) and the N180. The three-year NRP plan restored hope, profits and confidence in the company by organizing cross-functional teams involving more than 500 employees. In only two years, more than 20 new or completely updated vehicle models were created.
N180, the second three-year plan, was designed to create lasting profitable growth, placing the company well above competitors in terms of profit margins and consumer satisfaction. The “1” in 180 stands for an additional one million unit sales worldwide by the end of fiscal year 2004 (projected: 3.6 million), compared with fiscal year 2001 (actual: 2.59 million). The “8” stands for an 8% operating margin, a percentage that would put Nissan consistently at the top level of profitability in the global automotive industry. The “0” stands for zero net automotive debt.
N180 relies on four objectives: more revenue (from a global market share of 4.7% at the end of 2001 to more than 6% by the end of 2004), less cost (reducing expenses 15% over three years), more quality and speed (focusing on product and management) and maximized alliance with Renault (finding synergies that benefit both companies).
“Even though they are separate programs, the first year of N180 actually ran concurrently with the third year of NRP, primarily because the NRP worked within two years,” explained Gaudette. “Already, two of the N180 program’s three basic objectives have been achieved. The operating profit of 8%, we’ve overachieved that performance. Zero manufacturing debt was achieved earlier as part of the NRP. The third one we’re working toward — the additional one million in sales — isn’t scheduled to be completed until next fall. That takes into consideration the expansion plans not only supported by the Canton facility, but also expansion plans worldwide.”
By May 19, about 156,000 vehicles had been produced at the Canton facility.
“As we complete the second phase of the Canton facility with the launch of the Altima in early summer, and as we ramp up through our operations, we have the capacity to support 400,000 vehicles,” said Gaudette. “That’s 400,000 in incremental sales, and that supports the goal of one million additional vehicles worldwide.”
Contact MBJ contributing writer Lynne W. Jeter at firstname.lastname@example.org.
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