The last chief of an independent Nissan saved the company by selling it
Earliest Nissan involvement: 1957
Role: President, 1996-2000
Key influence: Signed Renault alliance
That determination to survive led him to a rare distinction among Japanese executives. He sold his company to save it.
Selling to foreigners is an uncommon legacy in Japan. Hanawa bore the taunts of angry shareholders who derided him for turning over control to “occupation forces.”
Does he have any regrets? “With regard to the [Renault] alliance,” he says, “none.”
When Hanawa became president in 1996, Nissan was juggling 24 vehicle platforms. Its estimated debt was $30 billion.
He reduced platforms and production, slashed staff through voluntary early retirements, cut inventory, and sold the headquarters building in Tokyo's pricey Ginza area. It was not enough.
“The biggest weakness of Nissan was marketing,” Hanawa recalls. He set out to shore up marketing. “We needed to develop vehicles that would be accepted in the market. We had to identify the needs of the market, and this ability was lacking.”
In the years after World War II, Nissan's growth was on a par with Toyota's. But while Toyota was building a powerful sales operation, Nissan coasted on its reputation for technology. “We thought as long as a model had top technology, it would be accepted by the market. But we needed more for differentiation, design or comfort. Those aspects were becoming increasingly important, but our engineers were only pursuing technology,” Hanawa says.
Hanawa knew the trouble spots, but closing plants and laying off workers to the levels required were not accepted practice in Japan. Nissan was on track to lose money for the eighth year out of nine, but resistance to drastic change was strong.
“You have a boardroom full of 60- and 70-year-olds who are tremendously proud of what Nissan had done in the postwar era,” says Jack Collins, who became vice president of product planning and marketing as part of the Nissan-Renault alliance. “The alliance was a great idea, but first it took someone with real vision to realize what they needed to do to save the company.”
Nissan, Hanawa decided, needed an outsider's perspective.
Hanawa put his company in play, stating that he would “seriously study” another automaker's offer to buy a stake in Nissan. He met with DaimlerChrysler AG CEO Juergen Schrempp and Ford Motor Co. CEO Jacques Nasser.
Eventually, Hanawa and Renault SA's Louis Schweitzer reached an accord. In March 1999, Renault poured about $5 billion into Nissan for a 36.8 percent stake in the Japanese carmaker.
Hanawa wanted more than cash. He asked for three key people.
“One should be someone who is strong in cost cutting, a master at it. Another should be strong in marketing, and the third should be someone who can take care of financial management,” he says. “And we got Carlos Ghosn, Patrick Pelata and Thierry Moulonguet.”
But Hanawa was not prepared for Ghosn's first day on the job. “He came to me and said, "Make me a list of the 100 most capable young people at Nissan by tomorrow morning.' It was already late afternoon, and I was wondering why he was making such a unique request. Under the traditional approach, maybe after one week, you come to talk about the next step. He said, "I am now a part of Nissan, and I have to interview each capable young person so I can learn more about Nissan.' Ghosn is really speedy.”
Hanawa hadn't seen anything yet. Ghosn achieved the goals of his three-year Nissan Revival Plan in two years. Hanawa's determination to have Nissan survive had paid off.
You can reach Mary Ann Maskery at (Unknown address).