Posted by: David Welch on November 16, 2006
Renault-Nissan CEO Carlos Ghosn made an appearance in Detroit for the first time since General Motors Corp. gave him what must have been a stinging rejection of a plan to link the three auto makers up in an alliance. He says he’s still interested in a U.S. partner, but the timing is bad. So any real talks with Ford Motor Co. or with the Germans about taking Chrysler off Daimler’s hands just aren’t in the cards. Ghosn says he needs time to get Nissan’s profits headed back in the right direction and to focus on Renault’s coming new-car launches. That makes sense. Plus, Ford seems less interested in a tie-up these days. And the Germans figure they will give one more stab at making money with Chrysler before admitting defeat, driving a Jeep Commander to Versailles and handing the keys to the French. “Today isn’t the right moment,” Ghosn said. “There isn’t an opportunity out there.”
But he did hint that something else may be in the cards. When asked by reporters after the speech if he would maybe buy some of the U.S. plants that Ford and GM are closing, he didn’t rule it out. He said the cost of a new plant and real estate is big. Buying an old Detroit plant and retrofitting it to make new Nissans might be cheaper, he said. “We obviously are very pragmatic people,” he said. “Every time you need more capacity, you have to look at the best way to add it. If there is capacity available and there is a win-win for the seller, we’d do it.” Ghosn went further to say that his company’s current sales projections outstrip its capacity. In other words, he thinks he needs more plants.
Don’t expect Ghosn to hire some of the union hands who left those old plants, though. He has played hardball when the United Auto Workers tried to organize Nissan’s Smyrna factory. He wants nothing to do with the union. Even without hiring ex-GM or Ford workers—most of whom are headed off into retirement anyway—there is still a hint of irony. If Ghosn ends up buying idle Big Three factories, he would at least be restarting some of the plants that his resurgent Nissan helped make obsolete as they stole market share over the past six years. Bad news for Detroit, yes. But it would still be a tidy little gift to a U.S. economy that has watched manufacturing jobs disappear steadily since 2000.