By Steve Ruling

Following a $1 billion investment in two existing plants in Tennessee in the spring quarter, Nissan put its stamp on another Southern state in November. Mississippi joined the ranks of states in the South that can boast of at least one massive automotive plant when the Japanese automaker announced it would build a $930 million facility near Canton, north of Jackson. The plant is expected to initially employ 3,300 workers and 4,000 at full capacity, which is projected to be 250,000 vehicles annually.

Magnolia State officials ponied up in a big way to land Nissan. It has been reported that the automaker will qualify for up to $400 million in tax credits over the next 20 years for creating 4,000 jobs. The Mississippi Legislature also approved $295 million on roads, infrastructure and worker training. In addition, Nissan also qualifies for annual tax credits of $1,000 per job for five years and is exempt from property taxes, among other tax breaks.

While the incentive package could total nearly $700 million, it isn’t receiving nearly as much criticism as the 1993 Mercedes-Benz deal received when Alabama officials coughed up over $300 million in incentives and tax breaks to garner the German automaker. National news outlets buried that deal, claiming Alabama paid too much. The absence of negative news regarding Nissan’s incentives is most likely based on the fact that the Mercedes deal paved the way to bigger deals in Alabama, namely Boeing and Honda, as well as numerous spin-off projects.

The new Nissan plant will undoubtedly lure dozens of first and second-tier automotive suppliers to the American South. It will also place Mississippi on the big buffalo map. But how many suppliers Mississippi lures within its borders is up for debate. Naturally, the new Nissan plant will draw tons of suppliers, but where will they locate? The problem Mississippi is facing in luring suppliers is Tennessee, where a huge Nissan plant has operated for almost 20 years. Tennessee is home to 70 of Nissan’s major U.S. suppliers. It’s logical to assume that many of those suppliers will simply expand their Tennessee operations to serve the new plant as opposed to building new facilities in Mississippi. Mississippi does border Tennessee, making this border war for suppliers something to watch in the next two or three years.