Home » Automotive » Youth a plus for Nissan’s Canton plant with high-tech transformation looming
Mississippi Gov. Phil Bryant poses for photographers as he and Nissan North America Inc., chairman Denis Le Vot, sit inside the redesigned Altima following its unveiling at the Nissan Vehicle Assembly Plant in Canton, Miss., Thursday, Sept. 27, 2018. (AP Photo/Rogelio V. Solis)

Youth a plus for Nissan’s Canton plant with high-tech transformation looming

Joseph Deasonississi

Carla Bailo

Automotive expert says plant offers much-needed flexibility

By TED CARTER

The relatively young age of Nissan’s 16-year-old Canton assembly plant could help insulate it from company plans to cut global manufacturing capacity by 10 percent by spring 2022.

The planned capacity reductions coincide with a collapse in operating profits halfway through Nissan’s fiscal year. Some of the blame for the fall in profits rests with “an aged car portfolio” that must be replaced, Nissan CFO Mark Ma told the media in early November.

The Canton plant could be a strong candidate for assembling the vehicles that replace those whose time has passed, says Carla Bailo, a former 25-year Nissan executive and current CEO of the Center for Automobile Research in Ann Arbor, Mich.

» READ MORE: Nissan cites progress in getting rid of showroom freebies

The plant already has a lot of 21st century technology to build on, said Bailo, who served as senior vice president of research and development for Nissan North America. She also spent 10 years at General Motors.

Even if the Japanese carmaker scraps or pulls back on the weak-selling full size Titan trucks, light commercial vehicles and mid-size Murano SUV, the technological infrastructure there retains its value, according to Bailo.

“The good thing about,” she said, “is that plant was designed for those products.”

Its youthfulness gives it more flexibility, Bailo added. “You’ve got more smart components to work with. It is easier, then, to change production.”

Bailo said she saw that flexibility when Nissan smoothly outfitted the plant to add production of the mid-size compact Altima when market demand created a need for extra volume beyond the Altima output at the Smyrna, Tenn., plant.

“That all bodes well,” added the automotive industry think tank chief executive.

If there was ever a time for an automobile plant to have flexibility, it is now, said Bailo, who sees an industry future in which carmakers seek to create platforms that can be used for multiple forms of propulsion. “You’ll need a very flexible plant to make that happen,” she noted.

Still, it’s not as if the internal combustion engine is going away tomorrow, she said. “We are not going to sweat that until 2030.”

Bailo said Canton could be the winner when Nissan decides to bring the first battery-powered pickup truck to the U.S. market. The Titan could serve as the platform, though Nissan has been vague on the when and where of its electric truck project.

The thinking is that for an all-electric vehicle to sell well in the United States, it must be either a large SUV or full-size pickup. “Electrification will be key to trucks,” Automotive News reported Francois Bailly, global head of Nissan’s Light Commercial Vehicles business, saying at  a press event in November.

Bailly said Nissan’s success in a joint venture with China’s Dongfeng proves it can make a compelling electric pickup truck.

Automotive News reported that whether Nissan pickups receive hybrid powertrains or full battery-electric powertrains will hinge on the results of technology now in development, and also on affordability.

Whatever the company develops on the all-electric truck front, the vehicle must have the range and payload and tow capacity to compete well against conventional rivals, Nissan says.

Bailo’s assessment?

“It’s pretty clear they are going to put it into their portfolio,” she said of all-electric truck.

Canton also could get the opportunity to make the electric batteries the pickups will use, Bailo said.

Looking at the years ahead in the transformation away from internal combustion as a propulsion system, Bailo said more software and artificial intelligence will come into play.

Where Nissan’s Canton plant fits into the scheme of things could depend on how well the plant’s workforce functions “in a world of what I call continuous learning,” Bailo said.

“More of a risk to the manufacturing community is the intelligence that will go into these products,” she added.

Her advice is to start thinking hard about how to retrain the workforce.

Two facts will remain no matter how dominant and sophisticated software and artificial intelligence components become: “You’ll still need a product to put these things into. You’re still going to have someone assembling this product,” Bailo said.

The more immediate calculation for Nissan, she said, is what to do about Canton’s big trucks, light commercial vehicles and the Murano during a downsizing. “Most of those vehicles are the ones that aren’t selling well in this economy. Then it becomes, ‘How does Nissan choose to manage the capacity it has’?”

Nissan sold 50,459 Titans in the United States last year, 52,924, 21,880 in 2016 and 12,140 in 2015, according to Carsalebase.com.

Nissan sold 83,547 Murano SUVs, including its Sport model, in 2018, Carsalebase.com reported. By contrast, Nissan sold 148,720 Rogue SUVs in the United States last year, the company says.   

At the offices of the Madison County Economic Development Authority, Executive Director Josseph “Joey” Deason sees Nissan’s profits slump as part of a pattern the automotive industry has followed for decades. He said it’s why he is not so worried about the plant’s future as an economic engine for Madison County.

“When you look at the automobile industry as a whole, it’s not just Nissan,” Deason said in an interview. “I worked for General Motors for about 18 years. I would see volumes go up and go down. The industry will right-size itself accordingly.”

Deason agrees with the Center for Automobile Research’s Bailo that a young plant like Canton’s could have a lot to offer a project to modernize propulsion systems heavily reliant on artificial intelligence. The plant’s wiring alone likely offers great value, he said.

“A small example would be just the height itself,” Deason said. Today’s ceiling heights are much higher and so can offer more manufacturing options than older plants, he added.

“The future is bright” for Nissan in Canton, Deason said, and credited the plant’s flexibility for change as a major reason why.

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About Ted Carter