In November 2005, Nissan announced it was relocating to Tennessee to take advantage of lower taxes and cheaper real estate. The automaker established a temporary headquarters in Nashville as it builds a permanent home 15 miles south in Franklin, Tennessee, that is scheduled to open in summer 2008.
The company has not been hindered by the loss of talent resulting from the move, says James Morton, vice chairman of Nissan North America. Fifty-eight percent of the 1,300 employees didn’t relocate, including 20 percent of its management. Nissan has recruited aggressively across the country, particularly in the Detroit area.
"Last I heard, we had about 50,000 résumés," Morton says.
The company also realized several workforce-related benefits from the relocation, Morton says. Once it settles into its Franklin headquarters, Nissan’s financial, marketing, product planning and engineering staffs will be less than an hour away from the company’s manufacturing headquarters in Smyrna, Tennessee, where it has 6,500 workers.
"People are now in the same time zone and able to meet face to face easily," Morton says. "It’s easier to bring people together now."
Nissan hopes that having its employees in closer proximity to one another will facilitate faster decision-making and help the company stay ahead of its competitors, Morton says.
But losing so much Southern California talent is likely affecting Nissan’s sales, says Arthur Wheaton, a workplace and industry education specialist at Cornell University.
"As much as the auto manufacturers want to make it about the car and the mechanics, this is really a people business," he says. "Those people in sales and marketing were their biggest link to the dealerships. Losing a lot of those connections has to be hurting sales."
In September, Nissan North America reported sales of 88,340 vehicles, a decrease of 9.2 percent from the prior year.
Morton concedes that the company lost good people, but recruiting has been a top focus at Nissan.
"I am very pleased with the hires we have made," he says. "This is one area where we felt we did a very good job." The company has filled all key management positions, he says.
Even if Nissan has some short-term struggles while rebuilding its staff, the company will realize the benefits through cost savings in the long term, says Jim Hossack, a consultant at AutoPacific, a research and consulting firm in Southern California.
"They are going to be short on people for a bit," he says. "But Detroit is long on people and they will be able to bring in some great folks."