The End of Detroit (20 page)

Over the years, Nissan had sold small pickups that were popular with California surfers and other young buyers, and more recently had pushed into the mid-sized market with the Frontier. But it held off on a full-sized truck, even as Toyota dipped its toe into the pickup market in 1992 with the modest T-100, then followed up in 1999 with the bigger Tundra. By the late 1990s, it had become clear that in order to have the full lineup of vehicles that could expand Nissan’s reach, it simply had to have a pickup. On a trip to the United States in July 1999, Connelly brought together a group of 15 dealers to meet with Ghosn. Instead of the speech that Connelly expected Ghosn to give them, Ghosn peppered the dealers with questions. “He asked them, ‘What do you like? What don’t you like? What don’t you have?’” Connelly recalled. And the overwhelming answer was a full-sized pickup truck. The dealers, and Connelly, too, saw the vehicle as “an important sign that Nissan was committed to the U.S. market.”

But Ghosn did not commit to the project right away. For one thing, he was focusing on how best to use Nissan’s limited assets. For another, he knew that a pickup had to be produced in a new factory. Nissan’s plant in Smyrna, Tennessee, was full to bursting with product, and although workers there were among the most productive in the industry, the company simply couldn’t load them down with another vehicle. There was not one decision to be made, but two. Connelly, after the dealer meeting, had no idea how long Ghosn would take to make up his mind, given that he still had to finalize the company’s revitalization plan. He expected that the truck might take years to come to fruition. But as soon as Ghosn put the pieces of the recovery plan together, he began thinking about the pickup truck project—and called in an old friend to help.

Not long after Ghosn’s announcement at Nissan, he and Rita made a trip back to Greenville to check on their house and to see Jim Morton and his wife, Susan, with whom they had stayed in touch after Ghosn left Michelin. The Mortons had just spent a year renovating their home, and were excitedly showing the Ghosns around the vast new kitchen and expanded living room. As Susan Morton prepared lunch, Ghosn casually asked Morton if he’d consider leaving Michelin and joining him at Nissan’s operations in California as senior vice president in charge of finance and administration. Morton thought his wife wasn’t listening, but she was, and her first question was “Would we have to sell the house?” Morton recalled. They eventually did, because Morton accepted a job with wide-ranging responsibilities, one of which was to select the site for Nissan’s new truck plant.

Years before, Morton had been to Mississippi to look at possible locations for a Michelin tire factory. State officials had shown him a variety of sites, but the factory eventually went elsewhere. But Mississippi still had plenty of land for companies to choose from. And, having come in second or third repeatedly over the years when other companies chose states for their factories, Mississippi’s governor, Ronnie Musgrove, was determined to land the Nissan plant. Morton joined Ghosn and Emil Hassan, senior vice president in charge of Nissan’s U.S. manufacturing operations, at a meeting at the governor’s mansion to discuss the $1 billion project, which would be the biggest single manufacturing complex ever to be built in the state. Mississippi was one of only four states that Nissan considered. And from the moment the project was put on the table, Nissan took just six months to choose a site—far less than the 12 to 18 months that most companies require as they consider locations for factories and sift through various packages of incentives. The governor was so eager for the project that he gave Ghosn a cell phone, preprogrammed to speed-dial the governor’s number, and asked him to call when he had made up his mind. Early on a morning in November 2000, the phone rang from Tokyo with the news that Mississippi had won this time. Said Morton, “It is about as fast as I’ve ever seen anything come together.”

The overwhelming reception that Ghosn and the Titan received when the truck was introduced at the Detroit Auto Show in January 2003 eased the nerves of a lot of people at Nissan. Among the most relieved was the young design team that had worked on it at Nissan Design America in La Jolla, California. Known as NDA, the Nissan design facility is a workplace that is as much Zen as an office building. It is built into a hill, and could easily be mistaken for an architectural firm rather than a car company office, albeit one whose partners favor the Z 350 sports car, if the row of cars parked out front is an indication of their preferences. The low white building is decorated with manicured flower beds, a courtyard in the middle and pools inside the front door. But the decor pales in excitement by comparison with the work going on here. The place pulses with creativity. The staff of American, Japanese and European designers, of all ages, jogs through here in jeans and khakis, shirts and turtlenecks. The only people wearing suits and ties are clearly outsiders.

The group that took charge of the Titan was headed by Diane Allen, who, like many of the designers on Nissan’s staff, didn’t own a pickup truck and had little knowledge that she could bring to the project. Their lack of understanding drove the Nissan designers to hunt down pickup truck owners across southern California, Texas and elsewhere. They interviewed them about the way they used their trucks and observed them in action, watching them secure cargo with bungee cords and struggle to juggle children and gear inside the truck’s passenger compartment. Inside the Red Studio at Nissan Design America (the studios are named by colors), these owners’ pictures are taped to a big display, called a design concept board, that’s meant to express what the designers hope to accomplish. Atop the board is a list of priorities culled from watching the truck owners and asking them what they wanted in a truck. The answers sum up how the Titan turned out.

First, it had to be “a true Alpha truck” meant for “living large.” Second, its exterior had to be bold and assertive. Third, the interior needed to emphasize roominess and thoughtful innovation. Fourth came superior quality. Fifth, it had to express Nissan’s identity as a maker of vehicles with performance and personality. The conclusions came not from a research report conducted by the marketing department, Allen explained, but from the designers themselves. “We took out the middleman,” she said. “It’s why we’re unique at Nissan. This is us experiencing what the truck had to be.” As they spoke to the owners, the Nissan designers found that the potential market for the truck was quickly emerging. Many of the owners they met with had a Big Three pickup as well as a BMW or Lexus parked in the garage, a clear sign they’d be open to owning a pickup from an import company, said Nicholas Backlund, the truck’s design manager. “They just didn’t have another choice,” he said. Moreover, Nissan’s research showed that 13 percent of Frontier owners were defecting to Big Three pickups, since Nissan had nothing to offer them.

A few years before, Nissan had shown at the Detroit Auto Show a pickup concept vehicle called Gobi, which Allen had designed. It had an exciting, radical design, but it seemed far-fetched next to the classic pickups that Detroit companies sold. “It might as well have been a truck with wings,” recalled Backlund. The experience taught the designers that “there is an envelope for acceptability with a pickup,” Allen said. Added Backlund, “The question that we had to deal with was How do we become authentic? We didn’t want to be a sumo wrestler in a cowboy hat.” The answer, they concluded, lay in size. There could be no fudging, as Toyota had done first with T-100 and with Tundra. The Nissan pickup had to be every bit as big as a Detroit product, which posed a problem for the designers. The truck was the biggest vehicle that Nissan had ever developed. When it came time to build a life-size, mockup version honed from a block of design clay, “it wouldn’t fit on our milling machine,” Allen said. That problem was surmounted with new equipment.

Then came the issue of its appearance. Having been stung by reaction to the Gobi, the design team wasn’t sure how far to reach. So seven different versions were designed, from conservative to eye-popping. The list was narrowed to four, then two. At the same time that the truck was under development, the designers were working on the next-generation Quest minivan and two SUVs—one for Nissan, the other for Infiniti—that would be built alongside the truck at the plant in Canton, Mississippi. Two quarter-size tabletop models of each vehicle were sent to Japan for examination by Ghosn and Shiro Nakamura, Nissan’s chief designer, whom Ghosn had recruited from Isuzu in 1999. (Nakamura’s hiring had been another shock at the company, where designers had long ruled the roost, especially since Isuzu had never been known for its vehicles’ appearance. But Ghosn said he wanted a new approach from someone who had no preconceived notions of what Nissan should be.) Since the four designs would be manufactured together, Ghosn and Nakamura had to select them all at once.

The truck, to be built in Canton, had to be selected first. Of the designs sent to Japan, one version was polished, a bit conservative, and could have blended right in with the rest of the truck market. The other was bolder, gutsier, and was the slightly unpolished work of Giovanny Arroba, a 23-year-old designer fresh out of the Art Center School of Design in Pasadena, California, the automotive design world’s premier training academy, who had joined Nissan only a few months before. The truck was his first major project, and Allen and the other designers found a number of problems with his design, code-named G, which would have to be addressed down the road. Regardless, Arroba, who has shoulder-length dark hair and a quiet manner, said he’d relished the experience. “I love the challenge of this much sheet metal,” he said.

Having seen the designs, Ghosn, Nakamura and an entourage flew to San Diego to meet the team and hear their arguments in favor of each version. On a sunny day, Ghosn and the others examined scale models of the trucks out in a courtyard. Then he looked at the team and said, “Okay, if you believe it, G is picked. Let’s do it.” Allen said that was the moment when he was convinced that the Titan really could have an impact on the truck market. “There’s so much complacency among the domestics and it was so delicious to have Ghosn buy into it,” she said of the winning design. “As soon as Ghosn blessed it, the sea opened up.” Ghosn’s choice was also resonant for another reason. It’s routine in Detroit for auto companies to show versions of their future vehicles to consumers for their reaction. These sessions, called clinics, are supposed to gauge whether consumers would be likely to buy the vehicle. Frequently, changes are made in the vehicle’s appearance as a result of the feedback, sometimes slowing down the development process and adding cost to the project. Nissan, however, had abolished these clinics a few years earlier, for just that reason. “One of the biggest choke holds was that in these clinics people say, ‘Do away with this’ when they don’t really understand what we are trying to do,” Backlund said. On a project as vital as the pickup, the company might have been justified in holding clinics, given the stakes. But, said Backlund, “Nissan walked the walk and talked the talk on this project. This was a statement of faith.”

Even so, Nissan is deliberately cautious with its sales estimates for the pickup. At the Detroit show, Connelly predicted 100,000 sales a year; on the surface this is hardly a threat to the Big Three, which sell more than 2.3 million pickups a year. But clearly the company sees more potential than that. Down the road, it would like to hold at least 5 percent of the pickup market, meaning a minimum of 125,000 vehicles. “The truck market is huge,” said Jack Collins, Nissan’s U.S. vice president of product planning. And there’s more opportunity if Nissan can achieve the kind of loyalty rates that Toyota and Honda manage. Only about 25–30 percent of Nissan customers are repeat buyers, versus 50 percent at Toyota and about 65 percent at Honda. “Our plan to be a bigger company depends on getting into segments like a full-sized truck,” Collins said. But Nissan officials know that unlike Toyota with its pickups or Honda with the Odyssey, Nissan is not going to get a chance to build a starter truck, not with the fierce competition at hand in the market. “Nobody can hide today. But that’s healthy,” said Connelly. “It’s like playing 21 with your cards face up.” Nowhere is the gamble bigger than the one that Nissan is taking in Canton, Mississippi, where the pickup went into production in 2003.

The factory, Nissan’s second in the United States, sits squarely beside Interstate 55, two and a half hours south of Graceland and just 15 miles outside Jackson, the state capital. It sprawls along Nissan Parkway, all white except for a soaring archway, tiled in red, at the main entrance, and the name “Nissan” in red block letters out front. Inside lies a truly risky endeavor. In this brand-new plant, Nissan is building four brand-new vehicles—Titan, the Quest minivan, and the Nissan and Infiniti SUVs—with a brand-new workforce, most of which has never seen the inside of an automobile plant. And even before the plant built its first pickup or minivan, Nissan announced plans for a second factory here; it will build the Altima sedan, providing the company with a way to meet demand for the car, but also giving Nissan a complex that builds cars, trucks, minivans and SUVs, all on the same grounds. It’s a situation fraught with peril, but one that Nissan is attacking with Ghosn’s characteristic confidence.

Nobody in the industry questions Nissan’s American manufacturing expertise. Even as Nissan’s factories in Japan were operating half-full, its plant in Smyrna, Tennessee, outside Nashville, was repeatedly ranked as the most efficient factory in the United States in the annual survey by Harbour & Associates, a Troy, Michigan, consulting firm. In size, Smyrna is reminiscent of the big auto plants of Detroit’s glory days, sprawling with long rows of assembly lines where workers toil away on the Altima, Xterra, Maxima and Frontier. Years before its competitors boasted of their ability to do so, Nissan was building cars, pickups and SUVs in one plant, thanks to an assembly system that it called IBAS, or intelligent body assembly system. As the sheet metal pieces came into the welding area, the IBAS system detected which type of vehicle was being made and changed its welding apparatus, which encased the side of the vehicle, so that the robots could perform their tasks. The system looks big and clumsy now compared with the lithe operations at Toyota and Honda, but it did the job, and a smaller version of IBAS has been installed inside the Canton plant to build the trucks, SUVs and minivans. The system isn’t the only innovation here.