Manufacturing

Gearing Up for Business
The automotive industry continues to thrive in Tennessee

The Corporate Business Park in Clarksville is one of four Tennessee mega-sites.

Move over Detroit. Tennessee’s automotive industry is in high gear.

The Volunteer State is the fourth-largest producer of passenger vehicles and the fifth-largest employer of automotive workers in the nation.

“The automotive industry is one of Tennessee’s largest employers,” says Matt Kisber, commissioner of the Tennessee Department of Economic and Community Development. “It provides more than $6.5 billion in payroll to 160,000 Tennesseans who work in the auto industry. In the last 27 years, the auto industry has developed into one of the most significant industries in the state’s economy, and it brings a lot of recognition to Tennessee.”

One example is the highly publicized relocation of Nissan’s North American headquarters from the Los Angeles area to Franklin, Tenn., in 2006. Nissan’s partnership with Tennessee began in 1980 when the company started manufacturing pick-up trucks at its plant in Smyrna. Twenty-seven years later, the Smyrna plant builds five Nissan models, including the Xterra, Altima, Pathfinder, Frontier and Maxima.

“In 2006, we built 465,000 vehicles in Tennessee,” says Frederique Le Greves, vice president of Corporate Communications for Nissan North America.

Nissan has manufactured more than 7 million vehicles at the Smyrna plant since it opened. So when the company began looking for a new site for its North American headquarters, Tennessee was a no-brainer.

“We are always looking to improve our performance and the efficiency between our different functions,” Le Greves says. “We had parts of our activity in Smyrna, some in L.A., and our engineering based near Detroit. We wanted to put everybody together to work as a team.”

Nissan considered several states in the South, and “Tennessee made the most sense.”

“We wanted to be close to Smyrna, and Tennessee had a low cost of doing business,” Le Greves says. “It also made the commute much easier. More than 80 percent of our executives and more than 45 percent of our employees moved here, and everybody’s really happy in Tennessee.”

Nissan received more than 70,000 resumes from people all over the country to come work for the company in Tennessee.

“Relocation was easy, because all the positions filled up quickly,” Le Greves says.

One reason the automotive industry is highly sought after by every state is because it has a multiplier effect.

“Every one automotive job creates several support jobs,” Kisber explains. “Nissan’s move from California to Tennessee is a great example of that multiplier effect. Nissan moved 1,300 headquarter jobs to Tennessee, and for every one of those, there will be 10 jobs created here. There’s $500 million of new income in Tennessee as a result of Nissan being here.”

With BMW in South Carolina; Toyota in Kentucky and Mississippi; Honda, Mercedes and Kia in Alabama and Georgia; and Nissan and General Motors in Tennessee, it appears much of the automotive industry is migrating south. And Tennessee is emerging as its nucleus.

“We’re in a central, strategic location for automotive parts and suppliers to locate,” Kisber says. “Being in Tennessee puts suppliers close to the Southeast’s auto market and gives them a direct connection to Detroit and the auto industry there.”

With certified mega-sites in Chattanooga, Clarksville, Crockett County and Haywood County, more growthv is sure to come.

“I think we’ll see large-scale manufacturers locate to these mega-sites,” Kisber says. “And it’s probably accurate to predict they’ll be automotive.”

Story by Jessica Mozo

Additional Manufacturing Articles

The Place To Be