TRAVERSE CITY, Mich. -- Nissan, seeking to cut spending on transportation and delivered parts, is pushing suppliers to move closer to its plants in Tennessee and Mississippi.
The automaker wants about 100 parts to be made near its U.S. plants, but after three decades of vehicle production in this country, Nissan is only about one-fourth of the way to that goal, estimates Bill Krueger, Nissan senior vice president for manufacturing, purchasing, production engineering and supply chain management.
"It's really about localization for us now," Krueger said last week at the CAR Management Briefing Seminars here. "We're going to be convincing the supply base to move closer to us and move with us to gain more efficiencies, shrink down inventories and speed up the collaboration.
"Transportation counts now. It's not just, 'What is the lowest possible price we can get at your door?' It's now, 'What's the lowest price when it reaches our door. And what will it be when it gets to the car dealership?'"
Krueger's operation is on a tear. This year, Nissan will launch Sentra production in Canton, Miss.; Mercedes-Benz engine production in Decherd, Tenn.; and output of the high-volume Rogue crossover in Smyrna, Tenn.
Before its fis-cal year ends in March, Nissan also will start a second assembly plant in Aguascalientes, Mexico. Next year, it will move its Murano crossover from Japan to Mississippi.
With plans for additional production in the works, Nissan wants more suppliers nearby.
"I want to see our key suppliers at the grocery store," Krueger says. "When your suppliers are your neighbors, you talk to them every day. It's a better kind of relationship. When you put something on a rail car or a tractor-trailer and move it two or three states away, we lose that connection."
Krueger says he is sympathetic with suppliers and subsuppliers that were hurt by the 2008-10 economic crisis and are reluctant to expand.
But he says Nissan represents a different supply chain opportunity.
"We haven't been shutting down. We have a cadence of new products and programs going forward," he says. "We're growing. My capital budget for last year and next year is $5 billion. We are putting our money where our mouth is.
"The Rogue is going to be a big volume this fall. That's a substantial business," he says. "If you're really still nervous and you want to stay away, chances are you're going to have to shrink in our business going forward."