Nissan North America, Inc. (NNA), have announced plans to expand its engine and transaxle plant in Decherd, Tenn., and to maximize vehicle production capacity utilization at its Smyrna, Tenn., vehicle assembly plant.

The expansion at the Decherd plant will add more than 500,000 square feet to the existing facility. Construction is set to begin in the fall of 2000 and production of six-cylinder (V-6) engines will start in June 2002. The expanded operation, located approximately 80 miles southeast of Nashville, will include engine machining and assembly for the production of V-6 and V-8 engines that are not currently produced in North America.

At the Smyrna plant, the current plan is to increase production volume from its present level of 380,000 vehicles to 440,000 vehicles in fiscal year 2001. The plant will have the potential to reach output of 500,000 in the following years.

The company plans to invest a total of $1 billion over the next four years to expand its Decherd engine operations, maximize its production capacity utilization in Smyrna, and for new products investment (including costs for vendor tooling associated with the operations). Nissan estimates that current employment level of approximately 5,700 at the Decherd and Smyrna facilities could increase by as much as 2,000 by 2004.

"We'll be adding engine capacity that is currently not available to us from Nissan's plants in Japan," said Emil Hassan, senior vice president, North American manufacturing, purchasing, quality and logistics, NNA. "Nissan's objective is to produce more powertrain and vehicles locally reducing total costs including logistics, minimizing the impact of currency fluctuations and getting the end product to the consumer more quickly and efficiently."

The move also will help Nissan meet North American market requirements and maximize current production capabilities in North America, which also includes operations in Aguascalientes and Cuernavaca, Mexico.

The V-6 engine will be from Nissan's "VQ" family. For each of the past six years, the 3-liter VQ V-6 engine has been named to Ward's Auto World's "Best Engines" list. Currently, the Decherd plant assembles 2.4-liter, four-cylinder engines for the Nissan Altima assembled at Smyrna and transaxles for the Altima and the Nissan Quest and Mercury Villager minivans assembled by Ford Motor Co. in Ohio.

Employees at the Smyrna facility now build the Altima sedan, the Nissan Xterra sport-utility vehicle and the full range of Frontier pickup trucks, including the Regular Cab, King Cab and the four-door Crew Cab.

Thanks in large part to continued strong sales of the Xterra and Frontier line of trucks, Nissan Division sales in the United States increased 20.5% during the first six months of 2000 compared with the same period last year. During the next three years, Nissan will introduce at least 10 new models into the U.S. market, which is expected to reinforce the current sales momentum.

"Nissan's commitment to the North American market is based on high consumer demand for our products and our strong operations in the U.S., Canada and Mexico," said Hassan. "These moves will position us to bring production in line with market demand and to meet requirements of products that will be developed for the future."

"For nearly 20 years, Nissan has played a vital role in creating jobs and economic growth in Tennessee," said Tennessee Gov. Don Sundquist. "Nissan's decision to make this significant investment in the Decherd and Smyrna facilities is a vote of confidence in the state. We appreciate Nissan's continued investment in Tennessee and we look forward to building on our much-valued partnership."

"The skilled and motivated employees of Nissan in Tennessee, along with the pro-business attitude of the state of Tennessee, are key elements of our confidence in our success," said Carlos Ghosn, President, Nissan Motor Co., Ltd. "Our decision to expand at Decherd and maximize our production capabilities at Smyrna are consistent with Nissan's Revival Plan, aimed at restoring Nissan to lasting, profitable growth."