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Exit Plan: Follow Nissan

With so many workers opting to relocate to Tennessee, the message may be that California's charms aren't what they used to be.

July 31, 2006|John O'Dell | Times Staff Writer

Linda Johnston shed no tears as she flew away this month from the place that had been home for all 43 years of her life.

The administrative assistant for Nissan North America is among 550 headquarters employees who opted to stick with the company as it relocates from its freeway-bound campus in Gardena to the hill country of middle Tennessee, just south of Nashville.

The exodus began last month and is expected to wind up by today, when only a skeleton maintenance crew will be left at Nissan's 14-building complex on 40 acres near the junction of the 405 and 110 freeways.

About 750 of Johnston's co-workers decided to quit their jobs rather than head for the hills. Many were anchored by family ties, some by the draw of the Southern California lifestyle and others simply by fear of the unknown.

For The Record
Los Angeles Times Tuesday August 01, 2006 Home Edition Main News Part A Page 2 National Desk 1 inches; 45 words Type of Material: Correction
Nissan relocation: A caption that accompanied an article in Monday's Business section about employees of Nissan North America moving to Tennessee incorrectly said that manager Orth Hedrick was surveying his new surroundings. In fact, he was photographed in his Los Angeles apartment before his move.

Their departure creates a challenge for their old boss, Nissan Motor Co. Chief Executive Carlos Ghosn, as he pursues a proposed alliance with current partner Renault and General Motors Corp. As Nissan races to replace nearly 60% of its headquarters staff, including 13 of 60 top executives who opted to retire or change employers, some industry analysts have worried about a "brain drain" at the company.

At the same time, other observers laud Japan's No. 2 automaker for keeping as many workers as it has, crediting its choice of Tennessee as a fresh alternative to California and a quality of life that may have lost some of its luster.

Johnston, for her part, says she was thrilled.

"I wanted to move. I was frustrated with L.A. It's too crowded, there's not enough greenery. It was overwhelming. There's so much stress there. I wanted to get out," she said in a telephone interview from Nissan's temporary headquarters in the landmark BellSouth Building in downtown Nashville.

Nissan will call Nashville home for about two years until it moves 15 miles south. It is building a $100-million, nine-story headquarters in the newly developing Cool Springs area of Franklin, a suburb founded in 1799 and noted for its antebellum downtown. Its Confederate cemetery marks the site of the last major battle of the Civil War.

Some of those transferring with Johnston to Tennessee found the decision more difficult.

"There were a lot of sleepless nights, and I'm really going to miss Southern California," said Orth Hedrick, 44, a product manager who has worked on Nissan's Versa subcompact, Sentra sedan and Quest minivan. "But it came down to a choice between giving up a place I love or a job I love, and the job won."

Whatever workers' reasons for going, Nissan's 42% employee retention rate sends a message to businesses in California: The Golden State's charms aren't what they used to be.

"There is a bit of that attitude, especially at the state level, that California is just so great that no one would ever want to leave -- that its natural features, creative services and the quality of its higher education system are so good they're enough to get the job done," said Greg Whitney, vice president of business development for the Los Angeles County Economic Development Corp.

Nissan's experience argues against that conceit, he said. Typically, a company moving its headquarters 2,000 miles, especially from a major urban center to a smaller, more rural region, is fortunate to hang on to 25% to 30% of its workforce.

These days, though, California's schools are no longer among the nation's best, its infrastructure is deteriorating from a lack of funds for upkeep, and an ever-increasing population is crowding its cities and jamming its highways.

Companies usually decide to move for one reason -- to save money -- whereas employees have individual, often complex reasons, Whitney said.

"But the world is becoming more homogenized," he said, "and the fact that Starbucks are everywhere helps make moving a lot easier these days."

With the move, Nissan is ending a 48-year run as a Southern California company.

Its first sales here were made by Yutaka Katayama, now 96 and retired in Japan. He set out from Japan for the U.S. in 1958 with a few dollars in his pocket to peddle a boxy, underpowered car called the Datsun 210.

He would leave the tiny model with used-car dealers, who found that it was cheap enough and sufficiently reliable to entice customers. Katayama -- who later won renown in sports car circles as "Mr. K," father of the Nissan Z -- eventually patched together a network of dealerships. Sales took off with the arrival of the Datsun 510 sedan in 1968 and the 240Z in 1969.

Nissan has grown steadily from that modest beginning, selling slightly more than 1 million cars and trucks in the U.S. last year and 511,768 through the first six months of this year. It has surpassed Honda Motor Co. in global sales and trails only Toyota Motor Corp. among Japanese automakers. The U.S. accounts for a third of Nissan's global sales and half its operating profit.

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