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Renault-Nissan: Canton Plant Became the Catalyst for Automotive Industry Growth in Mississippi

Posted March 1, 2015 in Case Studies

The initial $1.4 billion investment has now grown to $2.9 billion. Assembly plant, operational in 2003 in Canton, Mississippi, now provides over 6,000 jobs and uses up to 50 megawatts (MW) of power; with subsequent expansion, plant now a 4.2 million-square-foot facility on 1,034 acres; recipient of Mississippi Major Economic Impact Act (MMEIA) assistance and $363 million State of Mississippi bond package.

Established in 1933 in Yokohama City, Japan, Nissan Motor Co., LTD manufactures vehicles in 20 countries around the world. In 1958, Nissan sold its first automobile in the U.S., and in 1983 it manufactured its first vehicle in the U.S., where it now has four plants. In 1999, the Renault-Nissan Alliance was formed as a strategic partnership, and the Nissan plant was built in Canton in 2003, the first of many automotive successes for Mississippi.

Business Challenge

The Nissan Project site selection process, which began in 2000, was a highly confidential, five-month operation worthy of James Bond. To maintain secrecy from request for proposal to site visit to site selection, the teams working on the project signed confidentiality agreements and used the code name “Longspur.” They were so careful about preventing information leaks that within two months, they changed the code name to “Delta.”

State and local agencies and Entergy worked together to respond to Nissan’s requirements regarding the site, geological/geotechnical profile, transportation corridors, property size and layout, and proximity to railroads, intermodal facilities and commercial airports. This data was gathered and provided to Nissan, along with information about Madison County, metro area demographics and employment statistics.

Property options were obtained on as much of the property as possible during the recruitment process to demonstrate that the company’s acreage requirements could be met.

When Nissan’s site selection team first visited the proposed site, the Mississippi team still did not know the company name. Based on what they saw, the site selection team voiced concerns about how the site would be accessed. Though it was adjacent to Interstate 55, just south of Canton, the property did not have direct interstate access.

The team was also concerned about the stability of the underlying Yazoo Clay soils, a water-loving mudrock that expands when moist and contracts when dry, making it a disruptive force in the construction industry.

In response to these concerns, the state proposed construction of an interchange on the north end of the site with access and frontage roads. The Federal Highway Administration would later be involved in approving the plans and specifications prepared through the Mississippi Department of Transportation for the new interchange and access roads.

The state also performed preliminary geotechnical soil borings and testing to determine an engineering design solution for construction with greatly reduced potential for the Yazoo Clay to affect the building.

Collaborating with Entergy

Both the cost and reliability of energy were critical factors in Nissan’s decision to locate the plant in Mississippi. Entergy worked with state and local agencies and officials on developing and presenting a proposal in a highly competitive bidding process that ultimately brought this business to Mississippi.

As part of the negotiation, Entergy furnished Nissan with a power-monitoring system that captured information on any power sag or spike as well as other voltage issues. Entergy also worked with the Mississippi Public Service Commission to determine an attractive pricing package.

Business Solution

The State of Mississippi, through legislative approval, committed funds to construct the proposed improvements for the site. The Madison County Board of Supervisors also committed county bond funds toward roadway improvements. Additional infrastructure grants were obtained through Canton Municipal Utilities from federal sources to assist with water and sewer improvements.

Entergy made major commitments to gain trust and prove to Nissan that the company would have the continuous, cost-efficient power required for its business to be successful. In 2000, after Nissan announced that the plant would be located in Canton, Entergy provided temporary service and, in only 15 months, built out the infrastructure, including two 230 kV substations to serve the plant. Transmission breakers were installed to sectionalize the transmission line to restore power more quickly in the event of an outage.

Five miles of new loop feed 230 kV transmission line and line work included purchasing the right of way as well as the substation sites. Entergy acquired additional right of way proactively for a potential third transmission feed to Nissan.

Entergy also dedicated an industrial account manager to serve as a single point of contact to ensure the project ran smoothly. Entergy met all the time constraints, and Nissan was powered by June 2002 and began operations in May 2003, paving the way for additional automotive companies to locate in Mississippi. Today, more than 200 companies have established operations in the state, creating 40,000 skilled jobs. Nine models of vehicles are manufactured in Mississippi, and with annual vehicle production exceeding 500,000, the state ranks in the top 10 in automotive manufacturing strength in the U.S.

The addition of Sentra production is a testament to the high level of production quality at our Canton plant. The Canton team has proved it can compete and win on a global scale.

-Bill Krueger
Vice Chairman of Nissan Americas, 2014

Key Industries

Automotive Manufacturing