Officials from auto manufacturing giants Renault-Nissan Alliance and Daimler, joined Tennessee state and economic development officials, to celebrate groundbreaking of an engine manufacturing facility at Nissan's powertrain assembly complex in Decherd, Tenn., expected to create 400 jobs in the region.
The new facility at 520 Warren Chapel Road will produce Mercedes-Benz 4-cyindar gasoline engines for Infiniti and Mercedes-Benz models. The cost of the facility estimated in the tens-of-millions of dollars was not immediately available. Currently more than 1,000 employees work at the 1.2 million square foot $683 million assembly plant.
"We begin an exciting new chapter for the Renault-Nissan Alliance and our continued investment in the United States," Mark Swenson, Vice President of Production Engineering and Component Facilities. He added the groundbreaking "marks the latest move in our collaboration with Daimler to localize production capacity and enhance our competitiveness in the global market."
"This is the newest milestone in our pragmatic collaboration and our most significant project outside of Europe so far," said Renault-Nissan Chief Executive Officer Carlos Ghosn. "Localized capacity reduces exposure to foreign exchange rates while rapidly enabling a good business development in North America, a win-win for the Alliance and Daimler."
Production of the new engines will begin in 2014, with an installed capacity of 250,000 units per year. It will be the first location where Mercedes-Benz manufactures engines in the North America Free Trade region, which served as an incentive for the partners to build the plant in Decherd. The Tennessee plant's strategic location will ensure a direct supply of engines for the Mercedes-Benz C-Class, to be built at Daimler's vehicle plant in Tuscaloosa, Alabama as of 2014.
According to a spokesman for both firms, Daimler and the Renault-Nissan Alliance first announced their strategic collaboration in April 2010 and are extending it to include the United States as part of both companies' growth strategy. The companies are also moving forward with a vehicle platform sharing initiative between Infiniti and Mercedes, and development of zero-emission vehicles. The decision to begin jointly producing engines in the U.S. marks the two organizations' collaborative effort's largest venture outside of Europe.
"In the context of our Mercedes-Benz 2020 growth strategy, we have decided that we will expand the production capacities required for this close to the customers. Through the strategic extension of our cooperation with Renault-Nissan we can realize near-market engine production in the NAFTA region on attractive economic terms and make optimum use of synergies arising from the cooperation," Dr. Dieter Zetsche, Chairman of the Daimler Board of Management and Head of Mercedes-Benz Cars, said. "Thus we are systematically broadening our manufacturing footprint in this important growth market."