Carlos Ghosn on Detroit and the Future of the Auto Business

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Nissan COO Toshiyuki Shiga with the Cube, which will hit the U.S. and Europe in 2009 Itsuo Inouye/AP Photo

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Are unions killing the American auto business?
Frankly, I don't think the question is unions. The question is: Do you have the flexibility to operate and be competitive? If a union helps you be flexible, then the union is an asset. If the union forbids or handicaps this flexibility to operate, then you have a problem. We have unions in France and Japan. If you can reach an agreement by which unions help you be flexible and [respond] to the market, in a certain way they become an asset.

What's the outlook for global auto sales?
I see a market low point in 2009 in the U.S. I mean, we're talking about 11.5 million cars next year [below sales in 1983]. So the trend we have seen in October and November probably will continue in December and into 2009. We all are hoping that the new Administration will go for a strong stimulus plan—not something moderate. But in the absence of this, we have to prepare ourselves for a very low market, not just in the U.S. but in Europe. Europe is already in recession. Japan is in recession. Even the emerging markets—Russia, Brazil—are facing some trouble. It looks like China is the only spot where we can still hope for some growth next year.

What must a carmaker do to survive and prosper?
First, you need to [weather] the next two years. That's a basic condition. To get through them, you need to make sure that you have a positive free cash flow. Or to put it another way, avoid burning cash. That's very fundamental. [You must be able to] still generate cash, even with a market as treacherous as the one we'll be facing. There is an end to any crisis, and this one is no exception. There will be an end. And you want to be ready. You want to have innovative products, strong fundamentals, a team that believes in the brand and believes the company will be ready to fight again. I don't think everybody is going to make it through this period of time, but those who survive will have a boulevard in front of them because people will still need to buy cars.

Isn't part of the problem in Detroit management-related, and hasn't there been a failure of imagination by U.S. carmakers?
I don't think so—no. I'm on different boards, and I talk to my fellow CEOs in energy, utilities, commodities, etc. Everybody is facing the financial drought. A lot of people are cutting back investments even though they are in very healthy industries because they are scared they won't find the financing.

What are your plans for an electric car, and tell me about the Nissan Cube. It's being relaunched in Japan today and will go to Europe and the U.S. in '09.
The Cube is a great car. Small, fuel-efficient. We will be addressing a new wave of young customers, particularly in the U.S., with a car like this. We're transforming the Cube into a global car. And we're going to relaunch the Z. With these, we are renewing and giving a new skin, a new engine, and new technology to nameplates of the brand. But the electric car is different. We're going for a breakthrough—something that will get the attention of many people in many countries. In my opinion, it's going to be a game-changer.

Maria Bartiromo is the anchor of CNBC's Closing Bell.