Lifestyle

Ghosn's Next Moves


When people speculate on who would take over General Motors (GM) if the company's board decided to dump Chairman and CEO G. Richard Wagoner Jr., Renault/Nissan Chairman and CEO Carlos Ghosn's name routinely comes up. He did, after all, yank Nissan out of the fire with an aggressive recovery plan in 1999 after Renault bought a controlling stake in the company.

With lightning speed, Ghosn sold off noncore businesses, raising billions in cash to reinvest in new cars. He rushed out a wave of new models starting in 1999 and made Nissan (NSANY) one of the most profitable car companies on the planet. Last year, he graduated from the top job at Nissan to take over both companies. He must sail Renault out of the doldrums and reignite Nissan's growth. After growing as fast as 24% in some years, Nissan's U.S. sales are actually down a tick so far this year.

On Apr. 12, Ghosn gave a speech at the New York Auto Show, imploring other auto makers to stop blowing money on profit-sapping rebate deals and instead to spend on making cars that inspire passion -- and get better pricing. Car companies spent $60 billion on sales incentives last year, Ghosn said. For that money, they could have built 120 new models.

The morning of the speech, Ghosn took a few questions from the press. Here are edited excepts from his comments:

There's plenty of speculation that you would be a great candidate to turn around General Motors. Would you take the job?

I'm plenty busy with what I'm doing right now.

How will you get Nissan growing again?

I'm very confident. We have a lot of new product coming in the next couple of years. But the second wave of product is always more difficult.

Given the volatility of oil prices, global-warming concerns, and the bleak prospects of Middle East peace, how quickly do you think we need to get away from relying on oil?

Very fast. The question is, what are the solutions? I'm less of a one-solution man. I think even though hybrid is one solution, it's not the only solution.

One that's growing is ethanol, or biofuel. That makes sense if oil is $30 a barrel. This isn't a finite solution. Ethanol sources can be rejuvenated, and you don't have to rely on anyone to import it. You'll also see more diesel engines. But I don't think we will see a solution in the next five years.

Nissan has had quality issues with some of its new vehicles. How far along are you in fixing them?

Our warranty claims have dropped by 80% in the Canton, Miss., plant, where most of the problems were. Last year, we were the most improved company in J.D. Power's initial quality survey. This is something [in] which Nissan -- which is a Japanese company with Japanese DNA, using the same processes as other Japanese companies -- can be at the same level as Honda (HMC) and Toyota (TM).

There's a lot of labor unrest in developed nations. How do you manage that in your company?

All of Europe is struggling with two contradictory elements. In developed countries, many people feel it will be difficult to marry the stability of labor contracts with competitiveness in the face of emerging markets. People in Europe are starting to admit that we're going from a bipolar world -- with the United States and Europe at the poles -- to a multipolar world with India, China, and other economies coming on.

O.K., but how do you manage that with labor unions?

I don't think the problem is only with labor unions. People want to see the benefits of globalization at the employee level. You can see the benefits to customers and shareholders. It's a challenge. We have to explain this to our employees and motivate them.

That sounds easier said than done. What's the benefit of globalization to employees in developed nations?

That's what we need to figure out. Employees in developed nations are skeptical.

What's your outlook on cars coming from China under Chinese brand names?

You can't compare them to the Japanese or Koreans, who had an advantage because companies from other countries couldn't compete in their home markets. If the Chinese come and beat us at our own game, then we deserve it, because we cannot say we don't have access to their market.


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