Nissan Plans To Boost Production; Will Mississippi Benefit?

CANTON, Miss. - As workers rush to complete Nissan Motor Co.'s newest assembly plant here, state officials are hopeful that the automaker's plans to boost sales worldwide will mean more production in Mississippi.

Once-struggling Nissan, on the heels of completing a three-year revival plan in two years, has said it plans to boost production by a million vehicles from 2.6 million and raise profit margins by March 2005.

In Canton, the company is a little more than a year away from the scheduled opening of its $930 million plant. Nissan plans to make 250,000 vehicles a year in Mississippi, a full-size sport utility vehicle, a full-size pickup truck and its next generation minivan.

The company's only other U.S. production facilities are in Tennessee.

"As we are studying and looking at what our current production capacity is versus the number of vehicles we plan to sell three years out, there is a need for more production,'' Emil Hassan, Nissan's senior vice president of North American manufacturing, purchasing, quality and logistics, said Thursday in Canton.

"But we're not ready to say when we're going to do it and where,'' Hassan said. "It's still in the study stages, but something will have to be done.''

In North America, Nissan also make vehicles in Mexico.

Mississippi created a package of incentives worth $295 million to attract Nissan to the state. The automaker already has hired 230 people to work in Canton and is expected to employ 4,000 at full production.

"We're certainly hopeful that Mississippi would be the beneficiary of their increased production activities,'' said Sherry Vance, spokeswoman for the Mississippi Development Authority.

"The state is willing and capable to assist Nissan in becoming the most successful automotive company in the world,'' Vance said. "Nissan's success is Mississippi's success.''

Earlier this week, Nissan said its earnings rose 12 percent last fiscal year, its best year ever under the revival plan with French partner Renault SA. The numbers underscored a stunning recovery by a company that had been ailing for a decade until its 1999 partnership with Renault, which now owns 44.4 percent of Nissan.

Gov. Ronnie Musgrove met last week in Japan with the man considered to be the architect of Nissan's recovery, chief executive Carlos Ghosn. Musgrove said that some of the firms building factories to supply the Nissan plant in Canton already are considering expansion.

He said Thursday he expects some suppliers to make those plans public "sooner than you think,'' but he didn't elaborate.

Nissan officials have said the automaker will use the latest in manufacturing systems in Canton that will allow components to reach the assembly line as they're needed. Some parts will travel by conveyer from suppliers within a couple of miles of the E-shaped plant.

Hassan said the plant is on schedule, but much of the more challenging work remains.

"This year is the crunch year,'' he said. "The first year is mainly getting the plant built. Now you have a lot more players involved. Now we start paying a lot more attention suppliers.

"They're not just producing to deliver to us on time. They're producing to our sequence, which means if they get in trouble in their sequence, it could dramatically affect us, and vice versa.''