Mitsubishi Motors is relocating its North America headquarters from California to Tennessee, the company announced Tuesday.
It's a move that will bring the Japanese automaker closer to its sister company Nissan and strengthen Tennessee's growing reputation as an epicenter of the automotive sector.
Tennessee Gov. Bill Lee and Department of Economic and Community Development Commissioner Bob Rolfe made the announcement with Mitsubishi Motors North America on Tuesday.
The headquarters move from Cypress, California, to Franklin, Tennessee, will result in an $18.25 million investment in the region and approximately 200 jobs, the company said. Mitsubishi's West Coast parts distribution center, currently located on the existing headquarters campus, also will be relocating. MMNA is working with Nissan North America to establish the parts center in a newly constructed shared facility in Riverside.
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"As we drive toward the future, this is the perfect time for us to move to a new home. While we say farewell to the Golden State with a heavy heart, we're excited to say hello to Music City," Fred Diaz, Mitsubishi Motors North America's president and CEO, said in a statement.
Mitsubishi Motors' North America headquarters has been located in California since 1988. The company expects the relocations will be completed by the end of the year.
"Over the years, Tennessee has become the epicenter of the Southeast's thriving automotive sector, and I'm proud Mitsubishi Motors will call Franklin its U.S. home and bring 200 high-quality jobs to Middle Tennessee," Lee, who took over the office this year, said in a statement.
Nissan has a production plant in Smyrna, Tennessee, and owns a 34 precent stake in Mitsubishi Motors.
Last week, Mitsubishi Motors Corp. shareholders approved the ouster of Carlos Ghosn, who was pivotal in the Japanese automaker's three-way partnership with Nissan and French automaker Renault until he was arrested on financial misconduct charges last year. Ghosn says he is innocent.
Mitsubishi shareholders then approved the appointment of Renault's chairman Jean-Dominique Senard to replace Ghosn. Renault owns 43 percent of Nissan.
Mitsubishi has also faced its own scandals.
In 2016, the company disclosed it falsified mileage data. That followed a massive cover-up over decades of auto defects thought to have helped cause a fatal accident. In 2004, its president, Katsuhiko Kawasoe, was arrested. He was sentenced to three years in prison, suspended for five years, and did not serve time in jail.
Along with the Nissan plant, German automaker Volkswagen operates a plant in Chattanooga, Tennessee -- the state's fourth most-populated city. The company unveiled earlier this year an $800 million expansion at the Tennessee plant, which is expected to create 1,000 jobs for electric vehicle production beginning in 2022. It's set to receive $50 million in state incentives.
Recently, Volkswagen workers voted against forming a factory-wide union -- handing a blow to the United Auto Workers' efforts to gain a foothold among foreign auto facilities in the South.
Meanwhile, General Motors also has a large manufacturing plant in Tennessee. Additionally, more than 900 auto suppliers, including large ones such as Hankook Tire and Bridgestone Americas, operate in Tennessee.