Monday, August 8, 2011

Nissan executive strives to drive automaker 'farther, faster'

Executive Q&A: Bill Krueger

Bill Krueger recently was appointed vice chairman of the Americas for Nissan Motor Co., the top resident executive in charge of the automaker’s operations in North, Central and South America.

He replaced Carlos Tavares, who was named to the No. 2 job at Renault, the French automaker that has a partnership with Nissan.

Tennessean automotive writer G. Chambers Williams III recently sat down with Krueger to discuss his new post; his goals for the company; and Nissan’s presence in Middle Tennessee, where it has two manufacturing plants and its Americas headquarters.

What is your new role at Nissan? And describe your background in the industry.

I’ve been in automotive since 1985. That’s when I got my start with General Motors. So over 26 years in automotive; I spent 10 years with General Motors, spent a couple years with a division of Harley-Davidson called Utilimaster, which was also in commercial truck manufacturing. Then I moved to Toyota, where I worked (almost) nine years before coming here. I’ve been here since October 2005.

In that time, I’ve had a chance to work in primarily the industrial operation but also business planning, procurement, logistics, and spent time both here and at Toyota visiting dealerships to keep an eye on product quality, on-time delivery and parts/service solutions.

It’s been kind of soup to nuts. Now, the biggest change in my new role as vice chairman, I will be having that full accountability for the sales performance every month. My responsibility is for supporting the entire region, from Canada down to South America — in all functions for Nissan and our Infiniti brand.

To whom do you report?

Well, we have a matrix organization, so I have a number of people to whom I report. We have an executive committee in Japan, and I’m accountable to virtually all of the executive-committee members. My immediate regional boss is Colin Dodge, who is the chairman of the Americas. It’s been one of those matrix organizations that’s really worked for us, and through the Japan earthquake, it was valuable to have people that I could pick up the phone and call and coordinate supply issues with directly. The head of the global supply-chain management organization used to work for me here in the region.

What are the biggest differences you’ve found between working for an American manufacturer such as GM and working for a Japanese automaker?

Probably the biggest difference — and I don’t know if it’s positional — was when I was with General Motors, I was very locally focused, where in my position now, I have to be regionally and globally focused.

The analogy I use is that working in the factory is like being in the engine room on an aircraft carrier. You’re focused on making sufficient power to move that large structure. And within General Motors, I was very much in the engine room, feeding and supplying and making sure that we had a very efficient, fine-tuned engine.

My roles and responsibilities within Nissan have been much broader. So, I have had to have much greater collaboration with all functions — sales, marketing, finance — as well as the industrial side.

How do the corporate philosophies differ?

What I think distinguishes Nissan specifically is our midterm plan: transparency of what our vision for the next three, and now up to six, years in the future is. That’s a collective understanding not only internally, but we make that transparent and visible outside the company, and I don’t remember seeing that three-year or six-year vision from my past employers.

What Nissan embraces is making sure … customers come back; that once we get them into our vehicles, we make lifelong customers out of them. We haven’t been perfect at it, and that’s one of those never-ending objectives, to keep getting better and better at that. Because once you lose the customer, you really don’t have a strong future. It’s over — forget it.

Nissan has had operations in Middle Tennessee since 1983 when the factory opened in Smyrna; you moved your Americas headquarters here in 2006. What’s in the future for Nissan in Tennessee?

The reason we’re here in the first place is that this was the right place to be able to form our manufacturing beachhead because of the work ethic of the people in Middle Tennessee, the access to customers, geographically where it’s positioned. I think that promise has been fulfilled, and keeps fulfilling itself with our manufacturing plants. I think it was really a marriage made in heaven when the decision was made to move here.

I’ve been here almost six years now, and I love it here, and my family loves it here. I used to hear that when I was with General Motors. The employees who moved down here to work at Saturn fell in love with the community, the people, the environment, the weather. We have had a great relationship with the community, here and at the Decherd plant.

There’s absolutely no uncertainty for me now that this is a great place to do business, and that it’s a great place to find talented, motivated people.

There was some criticism of the company about its decision to move the headquarters here from California. How has that worked out?

Moving the headquarters and the sales and marketing organization, I think, was a significant competitive advantage for Nissan. Our results speak volumes as to whether it was the right decision. Our market share has grown significantly, and I attribute a big part of our success and our potential to the fact that we are located here.

But we’re a regional organization, as well, and now we have a lot more opportunity to create synergies with Canadian and Mexican operations, our Latin American business, our Brazil facility. Getting at least the regional functions together is making it much easier now to be regionally focused.

Obviously, the terrible tragedy in Japan has sparked questions about the future. There has been speculation that the opening of the lithium-ion battery plant you’re building in Smyrna could be delayed along with the startup of production of the Leaf electric car there. What’s the status of those plans?

Right now, we’re in the construction phase of the battery plant, the building part of it, and that wasn’t impacted. The material and construction were contracted locally. The teams that we had in Japan training lost some valuable training time as we shut down (Leaf) production in Japan for a month-plus. So that put some of our training off plan, but being that we’re not going to launch for another year and a half or so, there’s plenty of opportunity to pull ahead and stay on track.

We should be able to be on time, without a negative impact. Had it been one of these programs that was going to launch imminently and all of the equipment was there, it would have had a much bigger impact. We’ve got time now to work our way through it.

When will hiring begin for the battery plant and for the Leaf production line, as well as for the other new vehicles being moved to Smyrna from Japan — the Nissan Rogue and the new Infiniti JX?

We’ve been hiring all along, and we are going to continue to hire. Right now, specific to the Leaf and the battery plant, we are hiring people to come in and take the places of some of our key trainers who are in Japan. So we’ve hired those back-fills for those positions.

But it’ll probably be staggered and staged over the next 18 months to get the initial volume of employees to support the launch of the Leaf, the JX, then it will probably be within 12 months of that when the hiring will take place for the Rogue.

We are kind of always in the hiring mode as the growth is taking place, and we’re typically three to six months in advance of the actual need so we get people fully trained and repositioned within the factory.

We’ll man up and hire for that initial expectation, but then we’ll kind of wait and see how the market responds. We have high expectations for the new vehicles that we’re launching, as well as for the vehicles we currently have. As the economy recovers, we’ll have growth, and as these new products come into the marketplace, we’ll have growth.

Most of your hiring now is of contract workers. Will there be permanent positions as well?

Initially, all of the factory technicians that we’re hiring are contract positions, and those positions as we grow will continue to develop. And we’ve got a strong wage progression with each of those contract positions.

We continually want to develop them, to improve their skill sets, to move to higher-wage positions within the factory. Our long-term plan is to have those employees working for us for a long time. They aren’t temporary jobs; these are long-term positions that we have for them. I think in the long run, we will have some of them that will convert to become Nissan employees.

What are your goals for this job?

Quite simply, to unleash the potential we have here in the region that my predecessor, Carlos Tavares, really set a strong foundation for. We’re not going to have to restructure; we’re not going to have to change direction; it’s a matter of shifting into the next gear and accelerating farther, faster. We’ve certainly got a product that we’re currently proud of, but we’ve got a lot more work to do.

Because we had a little bit of a stumble through the earthquake (in Japan), we’re just starting to build that momentum, and we got a little bit of a speed bump there. We’re producing at a high rate; during the first six months of this calendar year, our North American plants have outproduced Toyota and Honda.

It’s remarkable how we were able to react to that tragedy and the adversity of having the supply conditions that we had. Those are behind us, and I expect to meet our business plans as if the earthquake hadn’t happened.