#CAS2015 - Nissan Exec Addresses the Economic Club of Chicago

Discussion in 'In the News' started by xcel, Feb 16, 2015.

  1. xcel

    xcel PZEV, there's nothing like it :) Staff Member

    [​IMG]The following is the full speech from the Economic Club of Chicago (ECC) at the 2015 Chicago Auto Show.

    [fflash=left]https://www.youtube.com/v/Yb-tOl8AYH0?version=3[/fflash]José Muñoz, Executive Vice President, Nissan Motor Co., Ltd. and Chairman, Nissan North America, Inc. sat down with Brian D. Fabes, Second Vice Chairman, Forums of the Economic Club of Chicago at a luncheon at the 2015 Chicago Auto Show and gave his thoughts on a wide variety of topics.

    Chicago, IL, Feb. 12, 2015 -- Good afternoon, and welcome to the members and guests of The Economic Club of Chicago who are joining us here today. It's both an honor and a privilege to be invited to speak to you.

    Some of you may be wondering why a Spaniard, working for a Japanese company operating in the heart of the South, is standing here today to address this fine American institution.

    The answer, very simply, is to tell you a story of opportunity that represents the very best of what America has to offer.

    Let's go back in time. It was the late 1950s and Nissan was looking to the United States as a potential market to sell its vehicles. To see if it could work, a team of Nissan engineers was dispatched to the U.S. with a Datsun 210 to get a lay of the land.

    It must have made for an odd spectacle at the time - three Japanese engineers driving around the country in a small foreign sedan, with only 37 horsepower, attempting to understand both the U.S. market and local consumer tastes.

    As the story goes, there were some awkward conversations with the local police, a drag race with a Volkswagen Bug - which the 210 reportedly won - and even a car crash that knocked out the front teeth of one of the lead engineers.

    Upon returning to Japan, that same engineer, through broken teeth, reported to the Board of Directors his belief that Nissan cars and trucks indeed could be sold in the U.S.

    And so began Nissan's entrance into the American automotive marketplace.

    From those humble beginnings in 1958, Nissan's U.S. operations flourished from, at first being an importer and distributor of foreign-made vehicles, to today's $40 billion company operating two assembly and powertrain plants in the U.S. We located a headquarters in Nashville, a finance company in Dallas, R&D centers in Detroit, Arizona and Silicon Valley and a design center in San Diego.

    In total, we employ more than 22,000 U.S. workers. If you take into account our Nissan and Infiniti retail network, tens of thousands of additional workers count on Nissan North America for their livelihood.

    Here in Chicago-land, we have a sizable operation as our Midwest region is headquartered in Aurora, with responsibility for sales and marketing activities throughout the Midwest.

    Our Chicago regional team also manages the relationship with our 28-dealer network here in Chicago-land, who employ more than 2,000 workers and generated more than $1.5 billion dollars in revenue last year.

    In total, Nissan and our dealers contributed more than $25 million dollars to local Chicago advertising last year, and generated additional impact through community involvement and charitable contributions.

    Yet our story is much deeper than how a multi-national company benefits from doing business in this country. We are a success-story that is a template for a U.S. manufacturing resurgence.

    31 years ago our first made-in-America automobile rolled off a U.S. assembly line -a white Nissan pickup truck - at our plant in Smyrna, Tennessee. The fact that a foreign car plant existed in the southern United States was unheard of at the time, and that first year we produced nearly 20,000 vehicles for U.S. consumers.

    Last year, Smyrna produced more than 648,000 vehicles and was the top-producing automotive plant in North America.

    Let me say that again - Nissan's manufacturing plant in Tennessee produced more vehicles last year than any other automotive plant in North America…foreign or domestic.

    And the story that took us from that first American-made Nissan truck 31 years ago, to the country's top-producing plant today, says as much about the opportunity that American manufacturing offers as it does about Nissan's commitment to the U.S.

    More than that, however, our story stands as a model of how bold vision and forward thinking in both the public and private sectors is needed to bring more and more good manufacturing jobs back to America.

    I'd like to share some observations in this regard, and comment on some best practices that can help boost the middle class to foster a vibrant, prosperous U.S. manufacturing workforce. It comes down to three distinct yet interwoven areas of focus: Localized production, workforce training and capitalizing on the nation's changing demographics.

    Let's begin with localization.

    Two years ago, the New York Times ran a story titled, "In Pursuit of Nissan, a Jobs Lesson for the Tech Industry?" So, how is it that we only built our first auto domestically three decades ago, yet we're held up as a model for others in terms of creating more good jobs right here in the U.S.?

    It comes down to having seized an opportunity.

    Nissan made strategic investments in its U.S. operations to ensure the company is able to continue to build quality vehicles that meet the growing needs of U.S. consumers. Over the years, we continually expanded our manufacturing capacity to support future growth - and with each wave of investment, the growth followed. But importantly, it too was followed by another wave of investment. It's a virtuous cycle - the gift that keeps on giving.

    We currently enjoy our largest U.S. presence since Nissan sold its first automobile in America in 1958. Last year, Nissan North America:
    • Set all-time records for total sales, U.S. production and exports from our U.S. plants
    • Due to our localization efforts, we sold more than 1 million North America produced vehicles in the U.S. for the first time
    • We exported our 1 millionth U.S.-assembled vehicle
    • Our U.S. workforce set a record with 22,000 American jobs - including 16,000 of those in manufacturing - with the addition of more than 9,000 new team members since mid-2011
    I believe the term here is "big mo" - any way you look at it, Nissan North America is gaining BIG MOMENTUM. That's not just good for us; it's also good for the American worker and the U.S. economy.

    Nissan's record-setting performance in 2014 is attributable to a more than $10 billion of investment in American operations since the start of U.S. manufacturing in 1983.

    When the Smyrna plant opened its doors more than thirty years ago, it was a groundbreaking moment - bringing auto production to Tennessee for the first time and inspiring other auto companies and suppliers to follow Nissan's lead and set up operations throughout the South.

    Since that time, the Smyrna plant and its sister plants in Decherd, Tenn. and Canton, Miss. have been a force for economic development, creating thousands of well-paying jobs, boosting local economies and creating a winning model for others to follow.

    Our four U.S. manufacturing facilities have produced more than 13.7 million vehicles, 7.6 million engines and 57,000 lithium-ion battery packs. And we are now capable of producing more than 1 million vehicles, nearly 2 million engines and nearly two million additional engine parts annually.

    Localization remains an important part of Nissan's strategy in North America. The closer to the market that manufacturing is, the more responsive we can be — a key to remaining competitive. In total, we are now manufacturing 85 percent of the vehicles we sell in the U.S. right here in North America - up from 69 percent just a few years ago.

    Just last November, the all-new 2015 Nissan Murano crossover became the first Murano and the eighth vehicle assembled at our Canton, Mississippi Vehicle Assembly Plant. The 11-year old plant became the global source for Murano production, creating export opportunities to export markets around the world.

    The eight vehicles assembled in Canton represent the most diverse production portfolio of any manufacturer's assembly plant in North America and stand as a testament to Nissan's manufacturing versatility.

    In addition to having our vehicle production capacity in place locally, Nissan is also focused on supporting the capacity of our suppliers locally. Our recent market growth and investment in our U.S. manufacturing operations gives our suppliers and their investors the confidence to expand as well.

    In an effort to support the localization efforts of our suppliers, Nissan developed strategies that include locating suppliers inside our manufacturing facilities or investing in supplier parks adjacent to our plants.

    In cases when neither of these strategies is appropriate, we encourage suppliers to locate their production as close to our plants as possible.

    A recent example is our new $100 million supplier park, supporting 800 quality jobs. It recently opened next door to our Canton, Mississippi plant. The project provides essential space to support the on-site suppliers necessary for continued growth, while further supporting Nissan's overall strategy to transfer more production - and the jobs that go with it - to the United States.

    The new facility is a key component to the long-term sustainability of our U.S. business and serves as another example of how public-private partnerships drive innovation and economic development.

    As we close in on Nissan's goal of 10 percent of the U.S. automotive market, we are carefully considering our next waves of investment.

    Remember what I said earlier - that each wave of investment was followed by another wave of growth. So we are ready to capitalize on the opportunity.

    Localization has proven to be a smart and stable strategy for Nissan, but we've learned that it must work in concert with a plan to train team members in order to create a quality workforce.

    Today's automobile packs more computing power than the Apollo astronauts relied on to walk the moon and return safely to earth. And yet the next generation of internal combustion, electric, and even the emerging business of autonomous vehicles, will take onboard technology to far higher levels.

    At the same time, our innovation in design and manufacturing is also evolving at an astounding pace. Our workforce must evolve as well, and they've proven they're up to the task so long as the right tools and training to succeed are provided.

    That's why we need to reimagine our approach to workforce training and development. Our world is different today. Our products and technologies are different too. So we need to think and act differently about how best to retain, recruit and train manufacturing employees with an eye toward the future.

    The December jobs report from the Bureau of Labor Statistics showed an increase of over 250,000 jobs, with manufacturing employment increasing by 17,000 in the month. On average, the manufacturing sector added 16,000 jobs per month in last year, compared with an average gain of 7,000 jobs per month in 2013.

    Even in the midst of a resurgent phase of growth for American manufacturing, automakers are increasingly challenged by a shortage of skilled workers to fill key openings necessary for ramping up production to meet growing consumer demand. Nissan is no stranger to these challenges.

    Production increases of more than 254 percent at our U.S. facilities since mid-2011 required that we add 9,000 jobs. Identifying and hiring individuals with the requisite experience in skilled trades and engineering, and applicants qualified in the maintenance of advanced manufacturing technology, has proven difficult and poses a serious threat to our ability to reach 10 percent market share in North America in the near term.

    But now more than ever, we are looking to our state partners to join us in making necessary investments in workforce development and education to increase the number of skilled manufacturing workers to fill available jobs and fuel future expansion efforts.

    States have been quick to recognize that tying the training and skills that colleges are teaching directly to the current workforce needs of local businesses will help more citizens qualify for good-paying, high-quality jobs. Just last month, here in Illinois, Governor Rauner led a grand opening ceremony at Harper College's Career and Technical Education Center.

    It's a $38 million public-private project that offers training programs in fields such as manufacturing, welding, architectural technology, and public safety. It's this type of innovation that sets the U.S.'s next-generation workforce up for success.

    Closer to home for Nissan, we are encouraged to see a strong commitment to education programs like Tennessee Governor Haslam's 'Drive to 55' initiative, which focuses on increasing the number of Tennesseans with college degrees. A key part of this initiative, Tennessee Promise, provides two years of tuition-free community or technical college training to high school graduates.

    In Mississippi, Governor Bryant is pursuing a similar program to strengthen the manufacturing workforce in the state. The program provides financial assistance for students to pursue a community college tech prep program. In addition, the Mississippi Economic Development Council recently launched an award program that recognizes students who take at least four career-tech classes in high school.

    These efforts by state partners to make their workers more skilled, more trainable and more competitive are paying dividends and should attract even more manufacturers to consider setting up shop in those areas with a skilled workforce and with local and state officials who understand the mutual benefit of such forward-thinking investments.

    These programs have been effective at creating a pipeline of talent for our business. But we must do much more and I'm encouraged by recent progress. Ongoing efforts with state partners to develop curricula to meet the needs of our workforce are already helping overcome some of these workforce challenges.

    To accelerate efforts to find and train workers, Nissan and the State of Tennessee recently joined forces to build a state-of-the-art education and training facility adjacent to our vehicle assembly plant. This public-private partnership will provide training programs aimed at preparing workers for jobs in advanced manufacturing such as engineering, robotics and manufacturing maintenance.

    The new training center is a key component to the long-term sustainability and continued growth of our business in Tennessee and another testament to the State's commitment to advancing business through education.

    It will also develop a pipeline of skilled workers for our Tennessee manufacturing operations and critical opportunities for current and prospective employees to learn valuable skills in advanced manufacturing. Skills, I might add, that are transferable far beyond Nissan.

    Employees will benefit from hands-on training with skilled trades that can be directly applied to work in Nissan's Tennessee automotive plants or with one of our many suppliers in the region.

    Furthermore, Nissan is making direct investments in the workforce of tomorrow through a heightened support of STEM initiatives and technical education training programs.

    We provide financial support to many local, regional and national organizations to develop STEM programs for kids in elementary, middle and high schools, as well as college activities.

    Our efforts are geared toward exposing kids and teens—especially young women—to the infinite possibilities of having a solid STEM education and that it's not just about becoming an engineer, working in a lab or building robots. It's about developing versatile skills that are in high demand in today's modern, global marketplace.

    All of these efforts are helping a multinational company like Nissan to continue to want to invest in U.S. manufacturing. But many challenges remain for Nissan and other companies looking to follow our guide path…which brings us to demographics.

    An undeniable fact is that the face of the American consumer is changing. Companies in the U.S. and around the globe must adapt if we want to remain competitive. If they can attain it, Diversity may be the single biggest competitive advantage for companies moving forward. It's not only a smart thing to do, it's the right thing to do.

    It's no accident that Nissan has the most diverse consumer base of any automotive manufacturer, with 36 percent of our buyers being ethnically diverse. We understand that to stay relevant in today's marketplace, it's crucial to be in touch with each unique consumer group in a genuine way and to incorporate this into the core of our marketing plans.

    For example, we know that many Latinos are bilingual or Spanish-first, so Nissan was one of the first in the industry to provide consumers with bilingual tools to interact with the brand at various touch points. This includes a Spanish-language website and various in-language social media platforms that, to this day, are among the automotive industry's most engaging channels for multi-cultural consumers.

    As value-conscious consumers, ads that feature product information and utility resonate well among Asian Americans, more so than any other ethnic group. Ads featuring culturally relevant situations and characters make up 65 percent of top ads among Asian Americans.

    Knowing this, we recently launched a non-traditional campaign that reaches the Asian American millennial consumers. This group is strongly influenced by word-of-mouth, so we partnered with four popular Chinese and Taiwanese American celebrities and paired each of them with the Nissan vehicle that best captures his or her unique personality.

    These videos, filmed on location in New York City, introduced young Asian American consumers to the Nissan brand and products through individuals that they admire and with whom they can more personally relate.

    With more work to do, no doubt, Nissan is making good progress in ensuring that our workforce diversity better reflects those who are purchasing our products in the market place. Over time, this is an area we feel will be an increasingly competitive advantage for Nissan, and which other companies will have to pay particular attention to moving forward.

    I'd like to close by saying that I am proud of the success that Nissan's U.S. operations have experienced, particularly most recently.

    As you can see here [points to screen], Nissan enjoyed steady growth in the U.S. market in 12 out of the last 15 years - an astounding performance when you consider the ups and downs of the economy in general, and the auto industry in particular!

    Yet when you overlay the graph of our manufacturing investment onto this chart, it's clear that none of this would have been possible without three things: investment in localized manufacturing, expanding workforce training and understanding demographic shifts.

    It's been more than 60 years since that Nissan engineer had his teeth knocked out on his first trip to the U.S. He was scrappy and undeterred…as was Nissan…and we remain so today.

    Watch this space, because if you thought Nissan did well in the U.S. in the past 60 years - growing our U.S. market share, investing in local communities and providing good jobs - just wait to see what the next chapters reveal.

    Our story is the American story and there is so much more to come.

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