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Challenges overcome, success seen by companies

Plant suppliers iron out a few wrinkles during first year

When Nissan Canton workers take a lunch break, they head to the cafeteria, where their favorite meals are ready and waiting.

“We’ve done a good job, we hope, of finding out what everybody wants,” said Mike Craft, president and CEO of Valley Food Services of Jackson, one of the tier one and tier two Nissan suppliers in Mississippi. “The workers don’t have much time to eat so we make it as easy as possible for them.”

The cafeteria at the Nissan Canton plant is laid out much like a food court at the mall, featuring a deli area for sandwiches, a salad bar, meat-and-potatoes options and other choices. Valley also offers hamburgers, pizza, hot dogs and snack and beverage items at a trio of convenience stores located within the plant.

For Valley, it’s a tall order. More than 10,000 soft drinks are served each day. During a workweek including Saturday, Valley typically serves about 25,000 meals.

“Having the Nissan foodservice contract has obviously been one of our most important accounts,” said Craft. “A lot of doors have opened up for us around the country because when you say Nissan is a client, it carries a lot of weight. It’s very important to us to keep the people there happy.”

When production began at the Nissan automotive assembly plant in Canton last spring, Systems Electro-Coating (SEC), a joint venture between Systems Consultants Associates Inc., a Jackson-based minority-owned firm, and PPG Industries Inc., with a 20-year contract with Nissan, began supplying electro-coated frames and other vehicle components to the Canton plant.

First-year projections called for supplying 24,452 frames to Nissan, but SEC actually shipped 28,307. For 2004, the initial forecast of shipping 161,000 frames was recently revised to more than 170,000 frames.

“The best surprise is the level of support from all factions of the Nissan family — from Emil Hassan during his tenure and Dave Boyer to the communications control room staff and production crew,” said SEC president Toni Cooley. “Additionally, we have received tremendous support from PPG, our joint venture partner. We received help or advice from each entity in the areas of IT, marketing, production. Nissan has even marketed us to other suppliers, as well as OEMs. Technicians venture down to assist with equipment; shipping staff members offer assistance on packaging matters.

“The greatest surprise has been SEC’s level of delivery — that we have been able to deliver in a just-in-time environment is a major feat of which I am proud.”

The greatest challenge for SEC occurred before the doors were even open, said Cooley.

“Initially…(it) was identifying sources of funding for such a large project,” she said of the 125,000- square-foot plant built in the Canton Industrial Center. “Traditional financial institutions were looking for prior experience in the automotive industry, sufficient collateral. We had no prior automotive parts manufacturing experience. Moreover, the project was certainly the largest one our company had ventured. We had to be creative in packaging the deal and the financial institutions had to be receptive to doing business differently.” Another challenge: determining the necessary equipment to electro-coat parts, or more specifically, to apply an anti-corrosion electrodeposition primer to sheet-metal components and parts, which SEC had never done.

“Nissan and PPG were key in helping us develop equipment specifications, locate capable vendors and advise us throughout the engineering design and other startup phases,” said Cooley.

Equipment and information technology-related issues remain an ongoing challenge, said Cooley.

“Given the magnitude of our project, we had to be highly automated,” she said. “SEC is primarily responsible for delivering truck and SUV frames to Nissan in a ‘just-in-time’ environment. There is no human contact with our parts from the time Tower (Automotive) places a welded frame onto SEC’s induction lane to enter SEC’s electro-coating system until it exits the process two-and-a-half hours later entering into the inventory lane. The first time SEC’s staff comes in physical contact with the frame is when we remove it from the inventory lane, placing it on a truck to deliver one-and-a-half miles up the street at Nissan.

“Even at best, new equipment breaks down — sensors go out, tanks become clogged, computers freeze up. That is why it is important to have quality maintenance staff in place to respond to those daily, unexpected equipment occurrences. At SEC, we have a very solid, capable group of technicians who have been able to overcome our challenges.”

Dave Valkanoff, business unit leader at Tower Automotive, a supplier in Madison County, said first- year operations have been smoother than expected. The Novi, Mich.-based manufacturer of body structures produces 450 frames a day for the Titan pickup and 200 SUV frames for the Armada and Infiniti QX56.

“It’s always tough to do a new launch, and it’s a real credit to the team we have in place to meet the challenge,” he said.

Bob Croisdale, general manager of the CalsonicKansei North America plant in Vicksburg, which supplies front-end modules, exhaust systems, catalytic converters and air conditioning components to Nissan, said he’s been pleased with the training provided through the Center for Advanced Vehicular Systems (CAVS) and Hinds Community College, particularly the welding programs.

“The assistance we’ve received from the community college and college level has been incredibly helpful,” he said.

Locating enough skilled people remains an issue, said Croisdale. “We definitely have had too high of a turnover rate, which has been a concern, but we’re whittling it down and it’s not a major obstacle,” he said. “Even though we have a very intense interview process and inform people about the automotive industry, many are surprised when they get into the automotive environment. The speeds and quality requirements are very stringent and some people decided it wasn’t for them. If they get past the first couple of weeks, they nestle in well.”

Terry Burcham, plant manager of M-Tek Mississippi Inc. in Madison County, said he’s noticed some real improvement in worker productivity during the last couple of months.

“We’ve been able to bring our labor numbers to within budget and that’s a very good sign,” said Burcham, who added that the daily volume has been as high as 36 truckloads to the Canton facility, but has leveled off around 32 loads. “We are meeting their jobs per hour requirements on all four lines. We’ve worked through the learning curve and as the weekly volumes level out, we can reduce the amount of overtime. Plus, Nissan hasn’t been working as many six-day weeks, so that helps.”

M-Tek produces door trim, body side trim and roof liners for the four Nissan vehicles currently in production, but will not immediately supply components for the Altima.

“Initially, those will come out of our sister plant in Tennessee because they already supply those parts to the Smyrna plant,” said Burcham.

Kevin Logan, manager of Unipres Southeast’s body stamping plant in Forest, said its sister plant in Tennessee will also supply parts for the Altima.

“Because of transportation issues, there are some parts we’ll manufacture here,” he said.

Adjusting to the decline in demand for Quest parts has been difficult because Unipres made the largest investment in the minivan line, said Logan.

“Most of our labor force was here for that vehicle,” he said. “The facility was designed with the equipment for that vehicle, with two shifts running, and Nissan cut the production almost in half when the minivans didn’t sell as well. It’s made us rethink our strategy. We’ve had to tighten our belts and realign some production lines, and realign our staffing.”

Nissan increased demand for parts for its trucks and SUVs, which are better sellers, said Logan.

“We’ve had to work some overtime to keep up, but we’ve adjusted,” he said.

Charles Doty, president and CEO of Lextron/Visteon, maker of front-end and cockpit modules through a partnership between Dearborn, Mich.-based Visteon Corporation and Jackson-based minority-owned Lextron Corporation, was candid about the challenges his company has faced.

“We’re still trying to overcome some of them,” he said. “We’ve had to make sure we have the proper systems in place to communicate with our suppliers so we can support the Nissan platform. That’s still a work in progress.”

Other concerns have included “gaining a thorough understanding of modular manufacturing and getting our workforce up to speed quickly, and adjusting to the demands and fast pace of the automotive environment,” said Doty.

“It’s been a matter of overcoming the inexperience with training and ongoing training,” he said. “That’s been very crucial. We’ve had the pleasure of working closely with Holmes Community College. They’ve helped us develop the type of training criteria needed to make us successful. We’ll continue with ongoing training to progress with people development, which not only helps the company but also helps the employees develop other skill sets. I’m so grateful to all the people around the state who have believed in the work we’re doing and have supported this company and its employees.”

Nissan Canton plant manager Dave Boyer and human resources manager Galen Medlin have toured the state meeting with suppliers, who have hired nearly 4,000 employees.

“We know they are touching people throughout Mississippi by providing good jobs,” said Medlin.

Dan Gaudette, senior vice president for North American manufacturing and quality assurance for Nissan North America Inc., said the company appreciates the challenges suppliers have faced as they have launched or expanded facilities in the last three years.

“It’s truly a testament to many people to make everything happen on time,” he said.

Contact MBJ contributing writer Lynne W. Jeter at mbj@thewritingdesk.com.


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