| BUSINESSWEEK ONLINE : NOVEMBER 15, 1999 ISSUE | ||||||||
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| INTERNATIONAL -- INT'L COVER STORY
For Renault, a New Chance to Take on the World (int'l edition) Renault Chairman and Chief Executive Louis Schweitzer looks relaxed for a man who has just flown in from a tough week in Tokyo. Schweitzer had arrived in Japan just after Carlos Ghosn announced his radical restructuring plan for Nissan Motor Co., and had feared an avalanche of criticism. Yet the reaction among Japanese officials, union leaders, and Nissan's managers was decidedly measured. ''A Japanese newspaper put it best: It was a tough plan, but not a cruel plan,'' Schweitzer says in his eighth-floor office overlooking the Seine. ''And since Nissan has been through a lot of restructuring attempts in the past, it's important that this one work.'' That's an understatement. The new plan for Nissan is vital for both Renault and the ailing Japanese giant. Schweitzer's $5 billion investment in Nissan last May is a bet on the very future of the leading French carmaker. With Nissan, Renault has a shot at being one of the planet's few truly global players in the auto business. Without it, it would remain a European presence--but not much more. ''For us,'' says Schweitzer, ''it was a choice between staying regional or going global.'' Renault is no stranger to big transformations. When Schweitzer joined in 1986, it was a state-owned behemoth noted chiefly for its inefficiency and losses. It also had $9 billion in debt. Schweitzer, who had honed his political skills as a top aide to then Prime Minister Laurent Fabius, was soon promoted to chief financial officer. He wasted no time refocusing Renault on the bottom line, retiring debt, and forcing divisions to improve results. In 1987, the group had the first of nine straight years in the black. Schweitzer became chairman five years later, and in 1994, the French government began to take the company private. Renault went into high gear in 1996, when Schweitzer hired a tough young Michelin manager named Ghosn as an executive vice-president. Restructuring had just cost Renault $900 million in losses, and Schweitzer needed help. ''He has a good sense of what can be be done and how far to push,'' says John K. Lawson at Salomon Smith Barney in London. ''But you also need an operating man.'' The Schweitzer-Ghosn team worked wonders. With Ghosn on board, Renault met the strong demand for its hugely successful midsize model, the Scenic, an all-time best-seller in Europe. Offering six versions instead of the standard three, Renault soon had such rivals as Fiat and Peugeot scrambling. By last year, Renault was Europe's most innovative carmaker and the top-selling brand. The company earned $1.4 billion in 1998, on sales of $40 billion. FOUR-YEAR CONTRACT. Turning around Nissan will be much more difficult, Schweitzer says. Nissan is considerably bigger, and Ghosn wants to save more than two and a half times what he took out of Renault. And Nissan has little momentum. ''Back in 1996, we were ready to come out with the Scenic, so we had a product lineup in place,'' Schweitzer says. ''With Nissan, we have to figure out how to create a product lineup.'' Will Ghosn replace 57-year-old Schweitzer at Renault's helm? The betting at the company is that if Ghosn can show some results at Nissan for the year ending, say, March, 2001, he will be a shoo-in. Ghosn is now on a four-year contract. ''After that, he'll hopefully come back here,'' Schweitzer adds. But first he'll have to remake Nissan--no small task. By John Rossant in Paris _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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 RELATED ITEMS Remaking Nissan (int'l edition) COVER IMAGE: Inside Nissan CHART: Nissan's Woes PHOTO: Nissan's Altima Sedan PHOTO: Nissan's Frontier Crew Cab 2000 For Renault, a New Chance to Take on the World (int'l edition) INTERACT E-Mail to Business Week Online | |||
