(FORTUNE Magazine) – JAPANESE companies routinely hire talented Americans to sell their products in the U.S. But to run a factory, that spotlessly clean place where the plant manager sometimes bows as he passes an assembly-line worker? Unheard of. Yet when Marvin T. Runyon, Ford's vice president in charge of body and assembly operations, took early retirement in 1980 after years of frustration, Nissan Motor Manufacturing Corp. pounced. The company set Runyon up in Smyrna, Tennessee, managing what must seem to Detroit executives a plant in paradise: no union to contend with, a minimum of red tape, and no bean counters breathing down his neck restricting investment in automation -- attitudes Runyon chafed at when he was at Ford. Runyon's only problem: Paradise hasn't been very profitable. Ford, meanwhile, has spiffed up its manufacturing, got costs under control, and just out-earned General Motors for the second straight quarter. If Runyon, 62, has any regrets about leaving Ford after 35 years, he is not saying so. He adamantly refuses to criticize his former employer. Still, the handsome former Baptist deacon has been born again as chairman and chief executive of one of the U.S.'s most automated assembly plants. Terse and reserved with outsiders, he drops his guard on the job, where he's ''Marvin'' to everyone. He roams the plant floor wearing the same blue uniform as his employees, questioning workers about their jobs, soliciting their opinions. He has not yet mastered ping-pong, an Oriental passion, but some of his workers have. Nissan set up tables alongside the assembly lines, and Runyon has learned enough to cheer a good stroke when the games start up during lunch breaks. None of this would surprise Runyon's old colleagues at Ford, where his ability to motivate workers was legendary; he once organized a lunchtime feast of roast suckling pig to reward 800 employees for reaching the goals of his ''zero-defect program.'' Nissan still sounds confident that the ''Silver Fox'' -- a nickname Runyon acquired at Ford when his hair turned prematurely white -- can use that same zeal to make Smyrna profitable. ''I cannot wait forever until Smyrna turns a profit,'' says Takashi Ishihara, the chairman of Nissan. ''I have high hopes that it will in two or three years.'' Of the three Japanese automobile plants operating in the U.S., only one -- Honda's at Marysville, Ohio -- makes consistent profits. The joint venture of Toyota and General Motors in Fremont, California, has been intermittently profitable since February. Runyon does not expect to see consistent earnings at the Smyrna plant, located 15 miles from Nashville, until next year. In part, Nissan's problems at Smyrna reflect its woes worldwide. All five of the parent company's foreign manufacturing operations are losing money. They import lots of parts from Japan, and so have been hit by the shift in the yen/ dollar exchange rate: Recently it was 160, down from a high of 260 in February 1985. And because Nissan has also been losing market share to Toyota at home, its net income dropped 52% for the fiscal year that ended last March. Critics also blame Nissan for throwing around too much money -- its initial investment was $660 million -- too quickly at Smyrna. Nissan, however, is not the only company investing in automation without getting a quick return. Despite expenditures of $40 billion over the last six years to update plants and equipment, GM has been slow to achieve productivity gains, and its market share continues to slide (FORTUNE, November 10). Recently GM announced that its Saturn plant in Tennessee would produce only 250,000 cars a year, half the number originally planned. Runyon has since spent $190 million more at Smyrna, not all of it necessary to build cars. After getting assistance from 350 robots on the assembly line, for example, Smyrna's workers can retreat to a gym for a little body building. By next year they'll have a $3.9-million recreational spread that will include four tennis courts, two softball fields, and an archery range. One auto industry analyst refers to Smyrna as the Taj Mahal. By contrast, Honda made an initial investment of $250 million in its Marysville auto plant. The company recently increased that figure to $490 million, and its production this year is expected to be 27% higher than at Smyrna, which was recently making 10,500 Sentra cars and 6,800 light trucks a month. All the money obviously helps Runyon keep a happy shop. He pays his 3,300 workers, many of whom were jobless before Nissan came to town, up to $32,000, excluding benefits. United Auto Worker organizers say Smyrna's wages are $2 to $3 an hour below those of union plants, but that doesn't seem to bother Runyon's minions: The UAW's efforts to organize so far have failed. Runyon pumps up morale in Smyrna with what can be fairly called a fervent belief in participative management. He outlined his views in a speech last year before the Economic Club of Detroit, where he politely suggested that since American automakers couldn't compete on quality they were missing the bus by not competing against the Japanese on price. The only way to compete on price, he said, was to improve productivity, and the ''only way to improve productivity is through cooperation between management and employees.'' To that end, he meets weekly with small groups on the day and night shifts to discuss everything from employee benefits and swimming pool hours to new models the plant might produce. Every three months or so he holds a question- and-answer session with employees (absent workers can see it on videotape). At one recent gathering someone asked, ''Is the rumor of layoffs something we should be concerned about?'' Runyon's quick response: ''There are no layoffs in store.'' Runyon has equally fervent ideas about training employees. Even before Smyrna opened its doors, he spent $63 million to instruct his first 1,300 workers. Instead of learning about just one procedure or piece of equipment, they were taught every job on their part of the line. Once employees are up to speed, Runyon expects a lot from them. Technicians don't just work on the line; they also inspect their work and help maintain their equipment. ''The person doing the job knows the most about it,'' says Runyon, who has only five layers of management at Smyrna. ''Marvin lets us make decisions and he's always there to help,'' says Robert E. Drake, a former GM man who is a vice president at Smyrna. ''We don't have to wait three or four days to get an appointment with the boss the way we did at GM.'' As for the boss, he occasionally feels the home office meddles in Smyrna when it shouldn't. Explains Masahiko Zaitsu, chairman of Nissan Motor Corp. U.S.A.: ''At the beginning Mr. Ishihara told Marvin, 'Everything is up to you. Only the board will give you guidance. You do business as you like.' But sometimes middle managers in Tokyo give an order to Tennessee, which they shouldn't do. Marvin gets angry and I have to calm him down. He has a hot temper.'' THE ONLY SON in a family with four children, Runyon grew up in Dallas. His father, Marvin Runyon Sr., a skilled carpenter and auto mechanic, worked as a service manager for Ford, advising dealers in six states how to repair cars. Although young Marvin learned all about Ford and carpentry from his father, his mother's influence was obviously strong. In 1977, when Runyon was offered the job of running the U.S. manufacturing operations for Volkswagen, he refused because of his mother's bitter feelings about Germany. ''Her first husband died as a result of service in Germany during World War I,'' he explains. ''I didn't think accepting a job with a German company was something she could live with.'' In 1943 Runyon began his long career at Ford, starting on the assembly line at the Dallas plant where his father worked. He left the company for two years while he was an Air Force B-29 flight engineer. After getting a degree in management engineering from Texas A&M in 1948, he applied for a job at Ford's Atlanta factory. Runyon thought he had landed a position as a junior engineer. When he arrived in Atlanta, however, the plant manager decided that college degree or no, Runyon had to learn the job the hard way. Runyon was assigned to the chassis line, where his first job was attaching truck tires to axles. Most of the men on the line were a lot bigger than Runyon, who weighed only 150. He arrived home exhausted after his first day. That night he built a ramp, which enabled him to roll the tires right up to the axles. At first the men on the line laughed at Runyon's contraption. But after a few hours of watching him work, they asked if he would make ramps for them too. Runyon obliged, for free. Once he passed his test in Atlanta, Runyon went on to a variety of supervisory positions. He consistently designed tools to make each job easier. ''Marvin was the most versatile assembler I have ever seen,'' says Pete George, now the plant manager at Ford in Atlanta. In 1960, Runyon became assistant plant manager at Mahwah, New Jersey, a factory so troubled by quality and labor problems that it ranked last in productivity among Ford's 20 plants. He tackled the problems and began involving employees in decision- making. ''The response was great,'' he says. ''Nobody had ever asked for their opinions.'' When he left Mahwah in 1964, the plant was Ford's third most productive. Runyon has always been clear-eyed about what he wanted from his people -- and how to get it. ''You could never b.s. Marvin,'' says Emil Hassan, an engineer at Ford during the 1970s who now works for Runyon at Smyrna. ''When other big bosses came to visit, you could keep their tour to a certain part of the plant. You just made sure everything was clean and working properly in that area, and they would follow along. Marvin wouldn't go for that. He would walk all over the plant and inspect everything.'' The more Runyon demanded of employees, the more he tried to motivate them. In 1966, when he became manager of a new Ford plant in St. Thomas, Ontario, he invited Henry Ford II to the dedication ceremony. As an incentive for his zero-defect program, Runyon had posted stickers with the slogan ''Do it right the first time, right from the start'' next to the company's blue oval logo. When Ford's advance staff arrived at St. Thomas, they told Runyon to remove the stickers for the chairman's visit. It was against company policy to obscure the logo. ''If that is a requirement, then tell Mr. Ford not to come,'' Runyon fired back. ''This means too much for the morale of my people.'' A public relations representative from headquarters called to bargain. If Runyon promised not to make the mistake again, he could keep the stickers for the ceremony. Ford's visit went smoothly. Three years later Runyon moved to headquarters, where he held several managerial jobs before his appointment as vice president of body and assembly operations. < To hear his four children talk, Runyon was as demanding of them as he was of his employees -- but not always as effective at communicating. Runyon could be ''strict and sometimes stubborn,'' says Marvin T. Runyon III, 41, a supervisor in the controller's office at Ford. Runyon III worked at Ford for six months before telling his father he had the job. ''My father and I have always operated on an independent basis,'' he explains. ''I don't call him every time I do something and vice versa. We didn't spend much time conversing back then.'' Father and son have become closer in the last ten years and see each other five or six times a year. Paul R. Runyon, 29, has warm memories of his father. Despite long hours on the job, says Paul, a professional photographer, ''when he came home he was there for his family.'' OVER THE YEARS Runyon had become increasingly unhappy with what he saw as Ford's neglect of manufacturing. He complained of not having enough money to maintain equipment or to improve the quality of Ford's cars. And he resented that executives in marketing and finance earned considerably more than their counterparts in manufacturing. After several years of contemplating an early exit, Runyon finally announced his retirement from Ford in 1980, at the age of 55. Many companies, including Nissan, approached him with job offers. He rejected them all because he and his wife, also from Texas, wanted to move south. The bids he had got were for jobs in the North or Midwest. Nissan was considering a plant in either the Midwest or the Southeast. Runyon told the company's executives to call him back if they decided on the Southeast. Shortly before Runyon retired from Ford, the Wall Street Journal ran a story citing rumors that he would sign on with Nissan. In fact it was not until two months after Runyon left the company that Nissan asked Runyon to select his own plant site. But Runyon fell victim to the rumors. He was told by Ford that he would not get an executive's customary retirement gift -- a car of his choice -- unless he signed a statement that he would not go to work for a competitor. Runyon refused. At his retirement party he received a watch and a videocassette recorder -- both made in Japan, he pointedly told the assembled guests. He wouldn't put it this way, but Smyrna just may be Runyon's revenge. Auto analysts widely believe the quality of the cars and trucks he produces there is as good as or better than the same models made in Japan. The Sentra, Nissan's least expensive model in the U.S., has been this country's best- selling foreign car in 1986. Prices start at $5,500 and as of October 1, 130,000 had been sold. OVERALL, however, Nissan's U.S. sales this year have been disappointing: 415,000 cars during the first nine months, vs. Toyota's 449,000 and Honda's 476,000. Consumers are still confused by the company's decision to sell cars under the Nissan name rather than Datsun. Auto industry experts also say that Nissan has had image problems. Honda is known for its quality, and Toyota for its stylishness. ''Nissan has been building some pretty boring cars,'' says John Dinkel, editor of Road & Track. ''Even its sports cars, like the 300ZX, have become too heavy and clumsy looking.'' Dinkel believes that a new, more daring management team under Chairman Ishihara is beginning to move Nissan away from its stodgy reputation.

Marvin Runyon has never struck anyone as stodgy. ''He was quite the picture of a middle-aged businessman,'' recalls William O. Bourke, Runyon's former boss at Ford, and now chief executive of Reynolds Metal Co. ''Secretaries used to have the hots for him.'' Since Runyon's wife died four years ago he has been living alone in a six-bedroom house in Nashville (complete with small gym), but he is hardly a lonely man. As a leading citizen, he is in great demand as a lecturer and dinner guest. He tools about in a chauffeur-driven silver limousine made by Nissan, putting in frequent appearances at community and charitable events. He doesn't claim to be a good cook, but when prominent citizens of Nashville gathered recently for a cooking competition to benefit the March of Dimes, Runyon and a friend pulled out their pots and pans to prepare an old Japanese dish called Suki's Chicken and Buckwheat Pasta. The judges liked what they ate and gave Runyon first prize. ''Maybe some of the other cooks were better,'' he says. ''But we won.'' The big question now is whether Runyon can make Smyrna a winner for Nissan. He doesn't seem worried. ''My wife always said I would fail at something,'' he says. ''It hasn't happened yet.''