Ghosn, Carlos

Chief Executive Officer of Nissan and Renault

B orn March 9, 1954, in Porto Velho, Brazil; married Rita; children: Caroline, Nadine, Maya, Anthony. Education: École Polytechnique, engineering degree, 1974; École des Mines de Paris, engineering degree, 1978.

Addresses: Office—Renault S.A., 13-15 quai Le Gallo, 92513 Boulogne-Billancourt Cédex, France.

Career

P lant manager, Michelin, Le Puy, France; head of research and development—industrial tires, Michelin, Ladoux, France; chief operating officer of South American Operations, Michelin, Rio de Janeiro, Brazil; president and chief operating officer, Michelin North America, 1989-96, chairman, 1990-96; executive vice president, Renault S.A., 1996-99; chief operating officer, Nissan Motor Company, Tokyo, Japan, 1999-2000, president, 2000, chief executive officer, 2001—, co-chairman, 2003—; president and chief executive officer in charge of Renault and Nissan, 2005—.

Awards: Industry leader of the year, Automotive News, 2000, 2001; man of the year, honorary doctorate, Cranfield University School of Management (U. K.), 2002; Fortune Magazine (Asia), 2003; honorary doctorate, American University of Beirut (Lebanon), 2003; honorary doctorate, Kyushu University (Japan), 2003; Golden Plate Award, Academy of Achievement, 2004; industry leader of the year, Automotive Hall of Fame, 2004; honorary doctorate, Waseda University (Japan), 2005; Knight Commander of the British Empire (KBE), 2006; honorary doctorate, University of South Carolina.

Sidelights

T he product of an international upbringing, automotive executive Carlos Ghosn heads both the Japan-based Nissan and its French alliance partner, Renault. In the early 2000s, he was lauded for the successful execution of his turnaround plan for Nissan. While the Japanese automaker had been struggling with falling sales and profits, Ghosn led the company back to both competitiveness and profitability. Because of his triumph with Nissan, Ghosn was asked to head Renault and was allowed to lead both companies beginning in 2005. Though Nissan soon struggled again, Ghosn was expected to right the ship.

Born on March 9, 1954, in Port Velho, Brazil, Ghosn was the son of a Lebanese father and French mother. Ghosn was raised in Brazil and Lebanon, attending high school in the latter country. Ghosn received his college education in France. He studied engineering at the École Polytechnique, earning a degree in 1974, and the École des Mines de Paris, earning a degree in 1978.

Ghosn began his career with Michelin, the French-based tire manufacturer. He first served as a plant manager in Le Puy, France, then became the head of research and development for industrial tires at Michelin’s Ladoux, France, offices. He was transferred to Brazil where he became the chief operating officer of South American Operations. There, Ghosn began developing a reputation as a turnaround innovator, a reputation he took to his next career stop for Michelin.

In 1989, Ghosn moved to the United States where he became the president and chief operating officer of Michelin North America. In 1990, he added the title of chairman. During his time at Michelin, his company bought Uniroyal-Goodrich, and Ghosn played an active role in integrating the former competitors. Ghosn also developed a reputation as an effective cost cutter while working there.

Ghosn left Michelin in 1996 to return to France and join French automaker Renault S.A. as executive vice president. He continued to show his ability to cut costs while working at Renault, where he earned the nickname “Le Cost Killer.” Ghosn’s most significant cost-cutting measures came in 1997 when he instituted a company-wide program which led to the closing of the Belgian Vilvoorde plant as well as firing 3,500 redundant workers. There were riots in Belgium because of his actions, and many European politicians denounced him. Yet Renault became profitable again later that year.

Ghosn also played a role in Renault acquiring a significant stake in the nearly bankrupt Nissan Motor Company in 1999. He told Andrew English of London’s Daily Telegraph, “From the beginning we saw this opportunity but through a real partnership. Also, when we analysed Nissan, we saw that even though the company had very mediocre performance, there were a lot of strengths: good engineering skills, good reliability of the products, very good manufacturing systems. These were all assets that, if appropriately managed, would turn in your favor.”

In July of 1999, Ghosn was transferred from Renault to its new alliance partner, Nissan.As the company’s new chief operating officer, he faced a daunting challenge as the automaker was troubled, deeply in debt, lacked profitability, and had a declining global market share. Within three months, Ghosn laid down the gauntlet and announced his Nissan Revival Plan to turn the company around and make it one of the best auto makers on Earth in three years. He also promised that he and his top managers would resign if the automaker was not profitable in 2001.

As his plan was being implemented, Ghosn was promoted. In 2000, he became president of the company, and in 2001, he was promoted again to chief executive officer (CEO). Ghosn was the first foreigner to become CEO of a major Japanese company. During his first few years at Nissan, Ghosn had to answer related questions about the integration of culture between the French and the Japanese. He believed that in his company’s case, quick integration happened out of necessity.

Ghosn told Victoria Emerson of the Journal of World Business, “The Nissan Revival Plan came very fast and established strong objectives. It didn’t leave any room for mediation on the differences about cultures. We were all mobilized and engaged in the revival of the company. What we see today is that differences in culture as being used more and more as ways of listening to what different people can bring to the table to achieve our objectives for the future.”

When Nissan announced its numbers at the end of the business year in March of 2001, the company silenced any doubters about Ghosn’s plan as it posted its best financial results ever. Operating profits tripled to the equivalent of $2.38 billion. Ghosn’s company succeeded in part because it reduced purchasing costs, cut some 21,000 jobs, sold some of its assets, and boosted sales by four percent. While the Nissan Revival Plan was reaping immediate benefits, Ghosn still wanted to cut the company’s debt to less than $5.8 billion and turn an operating profit equal to 4.5 percent of sales, both by March of 2003. Ghosn also was thinking beyond his three-year plan, and in his Plan 180 (also known as Nissan 180), hoped to sell one million more vehicles worldwide by introducing 28 new models as well as get the company completely out of debt in 2005.

As Ghosn continued to meet his goals with his Nis-san Revival Plan in 2002 with record profits of $3 billion and a reduction in debt, he was lauded in Japan. In 2002, he was the subject of a manga (comic book) series produced in Japan entitled The True Life of Carlos Ghosn. In the comic, Ghosn was immortal-ized as a superhero who saved Nissan. The story integrated episodes of his life with Nissan’s celebrated turnaround, and sold more than a half million copies per issue. Other automakers also noticed Ghosn’s success, and there were constant rumors that he would leave Nissan and Renault for greener pastures. Renault worked to ensure that he would remain with the company.

In May of 2002, it was announced that Ghosn would become the CEO of Renault when the company’s chief executive Louis Schweitzer stepped down from that post in 2005. Ghosn was also to remain in charge of Nissan as an overseer. Before this shift in power took place, Ghosn was promoted within Nis-san to become the company’s co-chairman in 2003. That year, Nissan again announced record profits and cut debts to zero. Ghosn’s company also beat the targeted eight percent profit margin. In the first year of the 180 Plan, the only goal that remained was boosting sales by one million vehicles from levels at the start of the initiative.

As the Renault leadership changeover neared, Ghosn worked on appointing a successor, who would hold the COO position, to oversee day-today operations. In 2004, he began shuffling his duties by dropping a number of responsibilities in Tokyo while taking charge of North American operations. One reason for the change was a concern that Nissan sales goals were not being met in the United States, especially on SUVs and pickup trucks, as well as quality problems and the need to balance sales with incentives to ensure profit.

As scheduled, Ghosn returned to Renault to become the company’s president and chief executive officer, while retaining his nonresident CEO position at Nis-san, in the spring of 2005. By the end of September of 2005, Nissan had completed its Plan 180, reaching its last goal of increasing sales by one million cars. Yet the following month, sales suffered and there were concerns that Nissan might start flagging again.

Despite such problems, auto analysts believed that Ghosn would be the ideal candidate to turn around struggling American automaker General Motors. By 2006, both General Motors and Ford were considering pursuing Ghosn to ally with, if not jump ship for, their companies. Of the idea that he would leave for a new post, Ghosn told James Brooke of the New York Times, “It is very flattering, but at the same time you know that you are as good as your last quarter results or your last six-month results or your last year results. I know very well the rules. As long as you perform, you are good. Your management is as good as your performance.”

In 2006, Ghosn hoped to continue the success he built at Nissan with a new three-year plan, Commitment 2009, for Renault. This turnaround plan set high sales targets, increased profit margins goals, and ensured the third generation Laguna was among the top three models in its class for product and service quality. By 2007, it was hoped that these targets would be helped by Renault’s popular new entry sold in emerging markets worldwide, the Logan. Yet Renault’s sales suffered on the whole in the first half of the year, and the company was losing market share. Ghosn vowed sales would soon increase. More new products were slated to be introduced by Renault in 2009, further cementing Ghosn’s belief that Renault would experience a significant surge by 2010.

Ghosn also faced challenges in 2007 when Nissan did not increase profits for the first time in six years. While the company was still profitable through 2006, sales slowed as few new products were introduced and the rising cost of commodities cut into profits. Ghosn believed Nissan would turn around in 2007 and 2008 as Nissan introduced new products like the crossover SUV Rogue. He also gave into consumer demand in the United States for more environmentally conscious cars by announcing the introduction of cleaner-burning diesel engines in 2010.

In addition, Ghosn faced criticisms from the changes he was making at Renault. Pressure he was putting on staff was linked to suicides at the company’s technical center in Guyancourt, France. He also was blamed for the introduction of work from home and desk sharing policies, a radical change in the company’s conservative corporate culture. There were also concerns that his holding two highly demanding positions on two continents was resulting in ineffective leadership in both companies and contributing to the problems they faced. Ghosn remained confident, telling James B. Treece of the Automotive News, “You learn from your failures. So from time to time, when you miss, I don’t think it is a disaster. If you fail to learn, that’s a disaster.” To that end, Ghosn began staging a comeback for both companies at the end of 2007.

When Ghosn began devising his plans and other projects, he took an unusual approach: He started with a blank piece of paper. He told Kimimasa Mayama of the Independent on Sunday, “Believing by seeing is easy. Believing without seeing anything is much more difficult, even when you are the main dealer of the action. You have to move fast, but at the same time be very cautious. Any step can lead to disaster. The most difficult part is when you see something other people don’t see and can’t back it up by evidence. You question yourself. Am I doing the right thing? Am I going in the right direction?” With all his success, Ghosn has proven that he knows the answers to these questions.

Sources

Books

Marquis Who’s Who, Marquis Who’s Who, 2007.

Periodicals

Automotive News, July 9, 2001, p. 1; December 17, 2001, p. 23; May 5, 2003, p. 40; March 15, 2004, p. 3; July 9, 2007, p. 14.

Automotive News Europe, April 5, 2004, p. 24; February 7, 2005, p. 14; June 11, 2007, p. 2.

BusinessWeek, July 8, 2002, p. 53; July 22, 2002, pp. 46-49; March 17, 2003, pp. 52-53.

Daily Telegraph (London, England), February 1, 2003, p. 4.

Globe and Mail (Canada), February 8, 2007, p. G2.

Guardian Unlimited (London, England), October 24, 2006.

Independent on Sunday (London, England), May 18, 2003, p. 7.

Journal of World Business, Spring 2001.

National Post (Canada), January 15, 2002, p. FP10; May 10, 2002, p. FP12.

Newsweek (International ed.), December 17, 2007.

New York Post, August 24, 2006, p. 47.

New York Times, February 9, 2003, sec. 3, p. 6; November 19, 2005, p. C4; April 19, 2007, p. C3.

Toronto Star, June 22, 2001, p. D5.

Online

“Logan plays key role in Ghosn’s Renault turnaround,” just-auto.com, http://www.just-auto.com/articlerelated.aspx?id=90597&lk=nap (March 1, 2007).

—A. Petruso

Carlos Ghosn

Brazilian-born executive Carlos Ghosn (born 1954) has become known as one of the automobile industry's great turnaround artists. Dubbed "le cost killer" and "the destroyer" by those on the receiving end of his streamlining, he also had a more positive and more telling nickname: "Mr. Fix-It."

Ghosn's accomplishments were all the more noteworthy because they came at deeply troubled companies—Renault in France and Nissan in Japan—that analysts had written off as also-rans and even evaluated as approaching bankruptcy. Ghosn did not just rescue these companies; he turned them into market leaders. As the first non-Japanese president of an automaker in notoriously insular Japan, he seemingly broke all the rules of doing business in that country as he planned Nissan's turnaround, but the results he obtained were so persuasive that soon he was not just tolerated but loved by the Japanese public; he even became the subject of a 160-page graphic novel at one point. By 2006, although one major potential deal had fallen through, Ghosn (pronounced with the "gh" as in "ghost," and rhyming with "loan," with a silent "s") was being discussed as a potential savior of yet another troubled auto company, perhaps one in the United States.

Born into Immigrant Family

Carlos Ghosn was born in Porto Velho, Brazil, on March 9, 1954. His father, Jorge, worked for an airline and had a job involving lots of travel, something that would later seem very familiar to Ghosn, who has logged up to 150,000 travel miles in a single year. Ghosn's parents had immigrated from Lebanon, and when Carlos was six he and his mother returned to live there. Ghosn learned to speak four languages fluently, and he later began working on several others, including Japanese. In Lebanon Ghosn attended topflight schools run by the Jesuit Catholic order, did well, and moved to engineering school in Paris, France. As an adult Ghosn would attribute the ease with which he moved among different cultures to the global upbringing and education he had received. "I've always felt different," he observed to Christine Tierney of the Detroit News. "Because you are different, you try to integrate, and that pushes you to try to understand the environment in which you find yourself. That tends to develop one's ability to listen, to observe, to compare—qualities that are very useful in managing."

Ghosn earned two engineering degrees in Paris, the first from the Ecole Polytechnique in 1974 (a school that spawned an unusually large number of innovative European auto engineers) and the second from the Ecole des Mines de Paris in 1978. His career started unremarkably enough, as a management trainee with the French tiremaker Michelin. Soon he was managing a Michelin plant in Le Puy, France. He was promoted rapidly through the Michelin organization, rising to become head of research for the development of industrial tires by the mid-1980s. Then he was asked by Michelin to return to his Brazilian homeland and head the company's problem-ridden operations there as chief operating officer. Just over 30 years old, he was now responsible for a continent-wide manufacturing operation.

He would have had a ready excuse for failure: South American financial markets were chaotic during those years, and Brazil in particular suffered from severe inflation. But Ghosn succeeded brilliantly by overhauling the organizational structure of Michelin's South American operations, using a method that would become something of a trademark. He formed working groups consisting of people from different sections of the organization, and from different countries. French engineers met with Brazilian purchasing managers to plot the development of a new product, resulting in improvements that had been missed when each department had acted in isolation. Within two years Michelin's South American division had turned a profit.

Ghosn repeated this early success after becoming president and chief operating officer (CEO) at Michelin of North America in 1988. Newly married to his wife, Rita, and with a growing family that would eventually include four children, he added the position of chairman in 1990. In the United States, Ghosn engineered a merger with domestic tiremaker Uniroyal Goodrich that doubled the size of his division. He dealt with unionized Uniroyal Goodrich employees not by confronting them, but by convincing union representatives that flexible work rules were in the best interest of employees on the factory floor. But despite his record, there was an unofficial ceiling to Ghosn's advancement at Michelin. The business was family-owned, and its longtime head, François Michelin, had ordained his son Edouard as his eventual successor. In 1996, therefore, he agreed to talk to Louis Schweitzer, CEO of the money-losing French automaker Renault.

Slashed, Then Grew Company

Ghosn described Renault's corporate culture acidly; he was quoted as saying in Fortune that the company "put a premium on fine phrases and arcane knowledge," wasted time on "discussions about everything and nothing," and held the noncompetitive collective belief that "you can't always have high productivity and high morale at the same time." Ghosn pared unproductive fat from Renault, closing a factory in Belgium, idling some 3,300 workers, and acquiring the "cost killer" sobriquet. But he was never exclusively a ruthless economizer. Ghosn's skills lay more in effective management that speeded up new operations and thus increased sales. Renault flourished; it was 80 percent owned by the French government in 1992, but by the mid-2000s the government's share had declined to 16 percent, and Renault was the best-selling brand in Western Europe.

In 1999, realizing that he had a talented young executive as an asset, Schweitzer made a bold move: he injected $7 billion into the Japanese automaker Nissan, acquiring 44.4 percent of its stock, and sent Ghosn to Tokyo as CEO. The task facing Ghosn was daunting. Nissan was saddled with $20 billion in debt, had lost money for seven of the previous eight years, and had hit its production peak ten years before, in 1989. Ghosn himself estimated his chances of success at no better than even money. In his first year, Ghosn had to develop a restructuring plan that took continuing slow sales into account; Nissan's model line was widely viewed as having fallen behind those of rivals Toyota and Honda technologically.

Part of Nissan's problem was excess capacity, brought on by an unofficial contract-for-life arrangement that existed between Japanese auto companies and their employees. Ghosn broke with tradition by closing five factories and cutting some 21,000 jobs. He also took on the close network of relationships between auto companies and their suppliers, relationships denoted by a specific Japanese word, keiretsu. Ghosn slashed Nissan's debt by selling off the company's shares in about half of its roughly 1,100 keiretsu partners. Finally, he infused new engineering blood into the Nissan organization, hiring a top designer from rival Isuzu and bringing Renault personnel in from France. To cope with the variety of languages spoken, he instituted English as the official language for company operations and rewarded managers who learned to speak the language. "Having to speak English is very helpful, as it is not our native tongue; so we have to simplify our thoughts down to core issues," Nissan chief financial officer Thierry Moulonguet told Benjamin Fulford of Forbes. Other Westerners had held top executive positions in Japan, but when Ghosn was given the title of president at Nissan in 2000, he was the first foreigner to hold that symbolically significant post in Japan's auto industry.

The day after he was given that post, Ghosn faced a tense meeting of mostly Japanese shareholders, one of whom likened him to the armed forces occupying Japan after World War II. Ghosn was criticized for not having mastered the traditional bow common in Japanese business circles. Ghosn responded unflappably, with a recital of the financial figures and quantifiable business trends that always formed the nucleus of his discussions in meetings. Nearly bankrupt before he came, Nissan would, he said, return to profitability within the year. The company was ahead of schedule in meeting Ghosn's goal of cutting costs by 20 percent, and Nissan had 22 new models, with eyecatching designs, in the pipeline and ready for display at the 2001 Detroit Auto Show.

Touted as Presidential Candidate

In 2003 Ghosn announced a second and equally ambitious three-year plan, known as Nissan 180. His goals were to increase Nissan's worldwide sales by one million vehicles, reduce debt to zero, and achieve an 8 percent level of operating profit. By 2005, again ahead of schedule, the last two goals and been met and the third was well on the way. Ghosn's popularity in Japan skyrocketed after his rocky start. Japanese women named him the country's most desirable husband in one poll (he remained happily married) and a comic book was issued featuring him as its hero. In his troubled second homeland of Lebanon, Ghosn was mentioned as a possible presidential candidate.

Many of Nissan's sales gains came in the United States, where even Ghosn's missteps somehow turned into positive developments. A new Nissan plant, opened in Canton, Mississippi, to manufacture the redesigned Qwest minivan, ran into trouble due to its inexperienced workforce and dropped Nissan toward the bottom of U.S. new car reliability rankings. But Ghosn won plaudits in the automotive press after accepting responsibility for the problems, calling the situation a management error rather than blaming the workers, and sending a task force of 1,000 engineers to Mississippi to address the problems. Other Nissan models, such as a redesigned Altima compact and the luxury Infiniti line, were registering sharp gains at the same time.

The plan had been for Ghosn to take over the CEO position at Renault after Schweitzer's retirement in 2005, but instead he decided to attempt something much more challenging, and indeed virtually unprecedented in the corporate world: he stayed on as co-chairman at Nissan while taking the positions of president and CEO at Renault. Fortune noted that "It's as if [professional football coach] Bill Belichick decided to add the [San Francisco] 49ers to his duties as coach of the New England Patriots." Ghosn, shuttling between Paris and Tokyo on his executive jet, with frequent side trips to the United States and other world markets, barely broke his stride. He was not especially known as a technical innovator; indeed, Nissan lagged behind Toyota and Honda in the hot new hybrid engine technology. He was, simply, one of the most efficient managers in the world. "He's just the most disciplined man I've ever worked with," U.S. Nissan marketing chief Steve Wilhite told Dutch Mandel of Automotive News, who noted that "Once [Ghosn] has digested a problem, he is like the anaconda that swallowed a goat—everyone else is watching what he has just done, but he is moving on to the next meal. Ghosn has no problem making decisions quickly and decisively."

With the record he had amassed, it was perhaps inevitable that Ghosn would be recruited by General Motors or Ford, the Big Two of the American auto industry and each beset with many of the same problems Ghosn had solved at Renault and Nissan. After rumors that he was being wooed by Ford family patriarch Bill Ford Jr., news emerged in 2006 that General Motors, under pressure from prominent shareholder Kirk Kerkorian, was exploring a series of joint operations with Nissan. Speculation was widespread that Kerkorian hoped to install Ghosn as president of GM, the world's largest automaker (and world's largest corporation of any kind). After a 90-day review, negotiations between the two firms fell apart in the summer of 2006. Nevertheless, Ghosn refused to rule out a future partnership with an American automaker, and it was still an open question as to where the remarkable career trajectory of Carlos Ghosn would finally take him.

Books

Ghosn, Carlos, Shift: Inside Nissan's Historic Revival, Doubleday, 2005.

Magee, David, Turnaround: How Carlos Ghosn Rescued Nissan, Collins, 2003.

Periodicals

Automotive News, September 20, 2004; January 31, 2005; July 17, 2006; September 25, 2006.

Economist, February 26, 2005.

Forbes, October 2, 2000; July 22, 2002.

Forbes Global, May 22, 2006.

Fortune, July 21, 2003; March 7, 2005; April 4, 2005; December 11, 2006.

Time, May 19, 2003; March 27, 2006; August 28, 2006.

Online

"Nissan CEO: The Making of a Superstar," Detroit News, http://www.detnews.com/2005/autosinsider/0502/27/A01-101491.htm (December 12, 2006).

Carlos Ghosn
1954–

President and chief executive officer, Nissan Motor Company

Nationality: French.

Born: March 9, 1954, in Brazil.

Education: École Polytechnique, 1974; École des Mines de Paris, 1978.

Career: Michelin Corporation, 1978–1981, employee; 1981–1984, plant manager; 1984–1985, head of research and development of earthmover and agricultural tires; 1985–1989, chief operating officer of South American activities; 1989–1990, president and chief operating officer of North American companies; 1990–1996, chairman, president, and chief operating officer of Michelin North America; Renault Corporation, 1996–1999, executive vice president; Nissan Motor Company, 1999–2000, chief operating officer; 2000–2001, president; 2001–, president and chief executive officer; Renault Corporation, 2005–, chief executive officer.

Address: Nissan Motor Company, 17-1 Ginza 6-chome Chuo-ku, Tokyo, 104-8023, Japan; http://www.nissandriven.com.

■ In 2001 Brazilian-born Carlos Ghosn became the first non-Japanese person to head a major Japanese automobile-manufacturing corporation. As the president and chief executive officer of Nissan Motor Company, he broke the traditional Japanese business models that had stifled the automaker's growth. Within two years Ghosn had led the faltering company into a period of revival, breaking a ten-year string of losses or tiny profits. By the end of the first quarter of 2003, Nissan turned a profit of more than $4 billion. Involving himself in all aspects of the company, from designing to test driving, Ghosn made himself an icon for Japanese business culture by the middle of his second year in office. Ironically, he did so while breaking with many cherished Japanese traditions and protocols: closing plants, laying off workers, and cutting ties with suppliers that did not meet his standards.

Ghosn trumped his achievements at Nissan by becoming the only person to head two automakers on two continents.

He was tapped to follow Louis Schweitzer, his former boss at Renault Corporation, in hopes that he could repeat the successes he had in Japan at Renault's headquarters in France. Part of that success involved the development of common manufacturing practices, platforms, engine designs, and transmissions and other parts between the two automakers. Renault (which owned 44 percent of Nissan when Ghosn became head of the Japanese company) and Nissan also planned to coordinate such disparate functions of their business as forecasting sales, benchmarking manufacturing processes, and lowering the costs of warranties.

MAKING TRACKS IN THREE CONTINENTS

Ghosn (his last name rhymes with "own") was born in Brazil but moved to France in his teens and received his education at the prestigious French schools of the École Polytechnique and the École des Mines de Paris. After completing his second degree, Ghosn began a successful career at Michelin, then Europe's top tire manufacturing and marketing firm. In 1981, only three years after he joined the company, he was promoted to plant manager at the company's Le Puy facility. In 1984 he became the head of research and development of earthmover and agricultural tires in Ladoux. The following year he left France, returning to his native continent to become Michelin's chief operating officer of South American activities. In 1989 he became president and chief operating officer of North American companies, and in 1990 he was promoted to chairman of Michelin North America.

MAKING WAVES IN JAPAN

Ghosn left Michelin for new challenges at Renault, headquartered in Boulogne Billancourt, France. He served as executive vice president for three years before being sent to Tokyo to oversee Nissan Motor Company. Renault had just bought a controlling interest in the Japanese automaker, and Ghosn was dispatched to Tokyo in hopes that he would be able to bring Nissan's spiraling costs under control. Within months of his arrival Ghosn had laid bare a plan that would not only revolutionize the way business was done at Nissan but challenge some of the basic assumptions that lay at the heart of Japanese business methods. By shutting down plants, laying off workers, and severing ties with underperforming suppliers, Ghosn demonstrated that radical measures could be effective in changing the conservative Japanese business system. He expected the process of making Nissan profitable to take three years; it took only two.

Ghosn also changed the look of Nissan's line of automobiles. The leading Japanese automakers, Honda and Toyota, historically were cautious about altering the appearance of their cars. In contrast, Ghosn, according to Alex Taylor in Fortune, took risks by making over almost one-third of Nissan's product line within a couple of years. "Ghosn wants Nissan to stand for passionate innovation," said Taylor, "and insists that new products satisfy an unmet customer need" (July 21, 2003). The executive's record, the Fortune contributor concluded, seemed to forecast great things for the companies he headed.

See also entries on Nissan Motor Co. and Renault S.A. in International Directory of Company Histories.

sources for further information

"Carlos Ghosn, Nissan CEO," Time, http://www.time.com/time/2001/influentials/ybghosn.html.

"Carlos Ghosn, Nissan Motor," BusinessWeek Online, http://www.businessweek.com/2001/01_02/b3714015.htm.

Fonda, Daren, "He Did So Well, Let's Give Him Two CEO Jobs: Carlos Ghosn Renault," Time, December 1, 2003, p. 78.

Greising, David, "Nissan CEO Carlos Ghosn Lets Team Drive Turnaround," Chicago Tribune, November 25, 2002.

"Meet the People behind the Cars," Inside Nissan http://www.nissanusa.com/insideNissan/CorporateBiographies.

Meredith, Robyn, "Encore," Forbes, April 26, 2004, p. 72.

Taylor, Alex, III, "Nissan Shifts into Higher Gear: Carlos Ghosn Has Revved Up Profits at the Japanese Automaker. Now He Wants to Go Faster," Fortune, July 21, 2003, p. 98.

—Kenneth R. Shepherd