Ghosn, Ghosn, Gone - Nissan Moving to Tennessee

November 10, 2005
The rumor mill was right. At a Thursday night news conference, Nissan CEO Carlos Ghosn revealed plans to pick up the automaker's U.S. operations and move them to Nashville, right around the corner from the carmaker's big Smyrna assembly plant. The move follows Ghosn's decision to relocate Nissan's global headquarters, from Tokyo's tony Ginza district to the earthier - and affordable - Yokohama. On the surface, Thursday's announcement should save significant cash for the company. It's a lot cheaper to do business in Tennessee than out west.

But sheer economics aren't the entire picture. "In the short term, this is likely to be extremely disruptive," warns Dan Gorrell, chief automotive analyst with StrategicVisions. Simply organizing this grand move will be a huge logistic nightmare for the company. And then it's going to have to fill plenty of newly opened job slots. Current Nissan employees have been flooding the California market with their resumes, and it's a fair bet that a significant number of mid- and senior-level executives won't be around to join Ghosn for the grand opening of Nissan's new Nashville offices. On the other hand, some observers believe this is part of Ghosn's goal, to give the company a fresh start with new talent. And if nothing else, he'll likely have plenty of new names to pick from, what with all the cutbacks in Detroit.

Nissan is just the latest among many automakers who picked up shop, hoping to change the way they do business. Former Ford CEO Jac Nasser dragged his various import brands, including Jaguar, Volvo, and Land Rover, out to California, hoping to put them more closely in touch with their upscale customers. But after a brief and disappointing stint out West, Nasser brought home most of his Lincoln/Mercury team. Apparently, Detroit is the genetic home for the traditional domestic brands.

Audi and its downmarket sibling, Volkswagen, were once headquartered out East, then relocated to the Detroit suburbs. Now they're hinting at another move. Like Ford's Premier Automotive Group, the goal is to be closer to the prime import markets. So far, the German maker hasn't set hard plans for its move.

Back to Nissan, the short-term disruptions should pay off in the long run, asserts analyst Gorrell. It'll put marketing and other operations in closer contact with manufacturing. And it should also generate lot of cash. If the automaker simply sets the money aside, that won't do any good, says Gorrell. But if it goes into improving product, then this could be another brilliant move by Carlos Ghosn.

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