“When they saw the money, it didn't take much convincing,” Mr. Dove recalled. “We needed to reduce our frequency.”

Workers' comp costs are significant to Nissan's U.S. operations, which do not just compete against other auto manufacturers but also against other Nissan locations around the world to be selected as a manufacturing center for a particular line of vehicles. One complication is that unlike in this country, where comp is handled separately, non-U.S. operations roll workers' comp medical costs into national social programs.

“It's a friendly competition,” Mr. Dove clarified, while affirming that in today's economy, automobiles need to be built where there is the best potential for profit.

“The level of quality at Nissan is extremely high,” according to Mr. Dove. “The cost to build is taken off the bottom line, and workers' compensation is within that,” so the best solution is to improve safety and back-to-work programs.

Nissan North America has U.S. production plants in Smyrna and Decherd, Tenn., as well as Canton, Miss. Because of its success in managing costs, the Smyrna plant–which produces the Altima, Maxima, Xterra, Frontier and Pathfinder–was selected as the manufacturing center for the zero-emission Leaf, a fully electric vehicle expected to hit the market in early 2011.

The acceptance of “Safety One,” a loss control and risk management program, has made the difference in improving Occupational Safety and Health Administration recordable- and lost-time cases by 85 percent since 2000–coupled with a commitment by senior management to embrace the changes, Mr. Dove explained.

“Executives were trained, and that cascaded down to the floor,” he said. “This has been totally supported by our leadership–that safety message has to be owned. You have to live and breathe it.”

Accountability was another critical component, with financial incentives built into management compensation plans.

“As part of our overall business plan, our senior management bonus structure has a significant portion…tied to meeting their safety goals,” Mr. Dove noted in his award essay, with workers' comp performance indicators included.

Since 2007, Nissan's efforts have resulted in some very impressive improvements, such as:

o A 55 percent decrease in incurred losses, and a 67 percent drop in the number of lost work days.

o A 37 percent decline in the number of claims per 100 employees.

o A 37 percent reduction in incurred amount per units produced.

o Loss projections for the upcoming year have been reduced from $33 million in 2004 to less than $18 million for 2010.

Nissan stresses that it did not “reinvent the wheel,” so to speak, to improve its workers' comp risk management performance. The company had already been benchmarked by other firms but “strove to be world-class,” according to Mr. Dove, so Nissan looked to benchmark other firms with solid, thriving programs–specifically Alcoa, an aluminum manufacturer, and surprisingly a competitor, General Motors.

“GM gave us a tour of three or four different plants,” Mr. Dove said. “That convinced us. We knew it could work here.”

Mr. Dove said Nissan realized one point in common among GM and Alcoa was that both used the DuPont Safety Management System. It was DuPont workplace safety experts who in 2002 worked with Nissan's leadership to develop a customized solution–now known as Safety One–and an executive committee was established to support it.

“This is what makes it sustainable,” Mr. Dove noted. “There was a cultural change at Nissan–a more intentional effort and focus.”

But support from front-line personnel is critical, as well, he emphasized. “The employees want a safe place to work, and they understand what needs to be done,” he said. “Our employees want to work.”

The turnaround in Nissan's workers' comp program is a “side benefit,” in Mr. Dove's view. The real payoff is that through the efforts of everyone from the top down, “we don't have people hurt,” he said.

That is the true bottom line, he added: workers staying healthy and productive on the job, which leads to the construction of quality vehicles that consumers want to purchase, which produces higher profits and ultimately rewards for employees.

Nissan also became involved with the Tennessee Manufacturing Association to push for comprehensive workers' comp reform. In 2005, their lobbying efforts paid off, with the system altered to incorporate mediation and benefit review committees.

Since the reform's implementation, “the Nissan team has settled 760 claims, achieving savings of at least $484,000 in legal costs by avoiding the court system,” noted Mr. Dove.

In 2005, the company's Bermuda-domiciled captive was formed to retain expected losses while transferring variable losses to another excess insurance carrier to reduce overall costs.

Nissan looked at becoming a “qualified self-insurer” but determined that “the assessments and collateral requirements in Tennessee did not make it economically viable.” While there were some economic benefits to being self-insured in Mississippi, they were found to be “less than the administrative burden,” Mr. Dove explained in his award essay.

In 2009, taking advantage of a decrease in new claims to re-examine old ones, the company engaged in closing all open files. The initiative has resulted in a $3 million decrease in total incurred losses on claim closures.

Nissan North America is not resting on its laurels, as it continues to look for ways to get better, and now has enough history to develop predictive analytics to aid in the workers' comp claims process.

“It was just launched,” Mr. Dove said “We are unsure of how effective it will be, but we are loading it all with our history.” The analytics tool is from risk management brokerage Beecher Carlson.

Each day Nissan meets with the safety and medical teams as well as third-party administrator, ESIS Inc., to look at each incident–a process expected to be assisted by the analytics to develop timelines, milestones and potential time off of work for each injury.

“We are looking to predict the paths you could go–is it a high, medium or low day-away-from-work case?” Mr. Dove said. “We can focus resources to cases that need it and better handle the claim.”

If treatment is required, Nissan ensures employees get timely and aggressive help from good, effective doctors.

“Our basic philosophy is we will not compromise medical treatment for anything,” Mr. Dove said. “I am not sending an employee to a medical professional I wouldn't send any member of my family to.”