By MATT MYERHOFF
Nissan Motor Co.’s decision to leave Southern California is a dent to the region’s role as a hub for Asian and other automakers.
But Orange County’s Asian automakers say they have no plans to join Nissan, even though some industry observers contend a move could make sense for them.
“If you want to be trendy, if you want to know what’s coming next from a design and styling point, it’s vital for car companies to have people on the ground in Los Angeles,” said Brett Smith, an analyst at the Center for Automotive Research in Ann Arbor, Mich. But “every one of them would have some advantage in leaving California to cut costs.”
Cypress-based Mitsubishi Motors North America Inc. could draw some benefit from moving. It is the only unprofitable Japanese automaker and it’s struggling to recover from a disastrous couple of years that saw two scandals involving defects and unconventional financing that boosted sales but hurt profits.
“Mitsubishi is in such a state of flux, anything could happen to them,” Smith said. “There were rumors that they would partner with another car company, so they could move to that company’s headquarters.”
The automaker’s 25.5-acre campus in Cypress has housed its U.S. headquarters since 1988 and employs 480 workers in sales, marketing, finance and design. That’s about half the number of workers employed a year ago.
Mitsubishi benefits from the concentration of businesses supporting the auto industry here, as well as close access to the ports, freeway and rail systems and the automotive press, spokesman Dan Irvin said.
“That’s a tremendous advantage,” he said.
Another name mentioned is Hyundai Motor America Inc. of Fountain Valley, which recently opened its first U.S. plant in Montgomery, Ala., where it is assembling 2006 model Sonatas.
While the company has an 18-acre Fountain Valley site, parent Hyundai Motor Co. owns a majority stake in Kia Motors Corp., parent of Irvine-based Kia Motors America Inc., which is looking to build its first U.S. plant.
The two companies share parts suppliers. Kia and Hyundai executives met with the Mississippi Development Authority in September to discuss opening a plant there, according to auto analysts.
If that happens, it could make sense for both of them to maintain their front offices along the Gulf Coast.
“Their proximity to the Pacific ports has been important, because they imported all their cars,” Smith said. But “if Kia and Hyundai both have their manufacturing facilities in the U.S., then you might see some reason for them to move.”
Kia officials said they have no plan to move their U.S. headquarters. The company broke ground in July on an $87 million campus in Irvine that will include a 236,000-square-foot headquarters and a $17 million, 65,000-square-foot design studio.
Considered off the table for any move are Japan’s biggest automakers, Toyota Motor Corp. and Honda Motor Co.
Honda and Toyota, with U.S. operations in Torrance, both laud the advantages of being at the center of American auto culture.
“We’ve never considered moving out of California,” said Bob Pitts, group vice president of administrative services for Toyota Motor Sales USA, which has expanded its Torrance headquarters campus since establishing itself in the U.S. in 1957.
The company’s 130-acre campus has nearly 2 million square feet of office space, which houses marketing, advertising, sales and some research activities, as well as a 400,000-square-foot parts depot.
Toyota, which also has operations in OC, has a port facility for autos and parts in Long Beach. It also has a truck components factory in Long Beach, a joint venture plant with General Motors Co. in Fremont and a 900,000-square-foot parts warehouse in Ontario.
Honda has a 100-acre campus in Torrance that employs 3,500 people and houses sales, parts distribution, and research and development labs.
“The California car culture leads the U.S. in terms of design, driving behavior, and new concepts,” Honda spokesman Jeff Smith said. “The entire nation looks to California for what’s next in auto design and technology. It’s the largest market. It’s important for us to be at that spot.”
Nissan said earlier this month it plans to move its North American headquarters from Gardena to the Nashville area.
Chief Executive Carlos Ghosn cited lower real estate and business taxes as major reasons for the move. Nissan plans to spend $70 million to build a headquarters building. The first Nissan workers are expected to start moving from Gardena to Tennessee next June.
Nissan employs about 1,300 people at its North American headquarters campus.
Myerhoff is a staff writer with the Los Angeles Business Journal.
