Smyrna Preps for Nissan Leaf

SMYRNA, TN – Consistently rated one of the most productive vehicle-assembly plants in North America, Nissan Motor Co. Ltd.’s sprawling facility here will carry its efficiency theme in a new direction with the 2012 launch of the Leaf electric car.

A $1.6 billion U.S. Department of Energy loan will help finance retooling the 26-year-old plant to manufacture the Leaf and build a facility next-door for production of state-of-the-art lithium-ion batteries to power the vehicle.

In addition to the government loan, Nissan will spend about $400 million of its own money on the project, company spokesman Fred Standish says.

The auto maker has not yet outlined a timeframe for paying back the government. That information will be available when the loan deal officially closes, Standish says.

Although Leaf output will not begin domestically until 2012, Japanese-built models will arrive in the U.S. a year from now.

The “mother” plant in Oppama, Japan, will set the template for Leaf production and train a number of engineers and assemblers from Smyrna. That information will be shared throughout the plant here in training sessions in the coming years.

Overall, Nissan expects to add up to 1,300 jobs at the vehicle and battery plants, assuming both are running at full capacity.

Nissan has said Smyrna can manufacture up to 150,000 EVs annually, while battery production is pegged at up to 200,000 packs.

Maxima moves along Smyrna assembly line in 2008.

Both look optimistic, as Smyrna produced less than 150,000 vehicles through the first nine months with a lineup of two cars (Altima and Maxima) and three trucks (Frontier/Equator, Pathfinder and Xterra), according to Ward’s data.

All are gasoline-powered, although the Altima Hybrid rolls off this assembly line, too.

Smyrna’s current capacity is 550,000 vehicles annually, and output stood at 125,661 through September.

Until the downturn, Smyrna was humming along, steadily producing more than 400,000 vehicles annually most of this decade.

The high-water mark came in 2005, when the plant produced 494,801 vehicles, according to Ward’s data. The Altima sedan led the way, with 173,370 units.

Since then, production has trended downward. Last year’s tally was 310,403 vehicles. Output had not been that low since 1998.

Nissan operates two assembly lines in Smyrna – one for cars (two shifts), one for trucks/SUVs (one shift). The Leaf will share the assembly line with the Maxima and Altima.

Plant managers say it’s too early to discuss specific challenges associated with manufacturing EVs, rather than conventional gas-driven cars, but that a spur is likely to be added to the line so specific EV components can be installed.

Construction of the battery plant is expected to begin next year, and the footprint of the vehicle assembly plant will remain unchanged.

Despite the production downturn and significant downsizing, Nissan says it has not laid off a full-time plant employee. Current headcount is 4,000 hourly and salaried workers and 1,000 contractors. At one point, the plant had 9,000 employees, including contractors.

In July 2008, as it had in the past, the auto maker offered voluntary buyouts to technicians and salaried employees here and at the powertrain plant in Decherd, TN. The offer amounted to lump sums of $100,000 or $125,000, depending on tenure, plus medical and car-purchase benefits.

At that time, in response to plummeting vehicle demand, Nissan eliminated the night-shift truck production.

A few signs suggest output is on the upswing. After a dismal first half, truck assembly shifted from four to five days weekly in July. Three months later, car production also ramped up from four days to five.

The massive facility has 36 miles (58 km) of conveyors and more than 900 robots. Nissan has invested more than $2 billion in the Smyrna operations over the years. Parts arriving at the plant are installed within a day’s time. A vehicle leaves the assembly line every 27 seconds.

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