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Southland May Lose Nissan's Headquarters
The automaker is weighing moving its U.S. base to Tennessee or Texas, sources say.
By John O'Dell
Times Staff Writer

September 14, 2005

Executives at Nissan Motor Co. are seriously studying moving its North American headquarters in Gardena to Tennessee or Texas as a cost-cutting step, according to sources inside and outside the company.

The study stems from Nissan Chief Executive Carlos Ghosn's drive to slash general operating and administrative expenses worldwide next year.

Nissan spokesman Fred Standish said the company would not comment "on speculation about strategic business decisions."

Nissan North America employs about 1,300 people in Gardena and Carson, where its top North American management, marketing, advertising, sales, distribution and dealership development staffs work.

Rumors about the possible move have been circulating at Nissan for several weeks, one mid-level manager said.

It is unclear whether a move also would involve Nissan's North American design center in La Jolla, where about 100 designers work.

One possibility being studied is consolidating Nissan's Southern California offices with its U.S. manufacturing headquarters in Smyrna, Tenn., sources said. Smyrna, about 20 miles southeast of Nashville, is where Nissan's largest assembly plant is based. Nissan has about 7,000 employees there already.

A second option is moving Nissan's North American management to Dallas, where Nissan has a large finance operations center with about 800 employees.

There has been no decision about the relocation, sources said.

Ghosn, who is also chairman and CEO of Renault — which holds controlling interest in Nissan — once was called "Le Cost Cutter" by the French media for his relentless paring of operating expenses at Renault. He has told Nissan executives in Asia, Europe and the U.S. that he wants to see a considerable improvement next year in Nissan's already industry-leading 10.5% operating profit margin.

"One way to do that would be to reduce administrative and operating costs" including facility rent, salaries and benefits, said Robert Hill, head of Deloitte Consulting's Asian automotive group in Los Angeles.

Nissan was close to bankruptcy when Ghosn was tapped in 1999. Under his leadership, Nissan rolled out a string of hits with new designs for its Maxima and Altima sedans and launched the full-size Titan pickup and Armada sport utility vehicle. It has become one of the world's most profitable automakers and posted record earnings of $4.8 billion for its 2005 fiscal year, which ended March 31. Nissan is projecting a sixth consecutive record year for fiscal 2006.

The company's U.S. operations are a big reason for that: They account for about a third of Nissan's global sales and half of its profit.

Although there are some economic benefits to leaving Southern California, Hill said, there is a massive infrastructure and talent pool in the region because 10 Asian carmakers have located their U.S. headquarters here. "There's just an awful lot of talent they wouldn't have to draw on if they went to Tennessee," Hill said.

One industry consultant said he learned of Nissan's relocation study because a number of Nissan workers had asked about other jobs in the Southland because they did not want to relocate to Tennessee or Texas.

Nissan shares closed Tuesday at $21.65, up 3 cents.