Let the speculation begin.
During the next month, Japanese and foreign media in Tokyo will carry unattributed rumors, supposedly inside reports and raw guesses about Carlos Ghosn's plans to remake troubled Nissan Motor Co.
After Renault SA bought a controlling interest in Nissan, the French carmaker sent Ghosn, Le Cost Cutter, to Tokyo to direct the restructuring that Nissan itself had failed to carry out. His plans are due Oct. 18.
Like most Tokyo auto journalists, I wrote articles ahead of the French-Japanese tie-up that questioned its chance for success. Now, I believe I owe them the benefit of the doubt. I should back off and see whether Nissan will return to glory or stumble again.
So I don't want to speculate on the details of the restructuring, such as which plant Ghosn might close or how many more Nissan staffers will take 'voluntary' early retirement. I prefer to wait, and keep the big picture in mind. In that spirit, here are some of the pros and cons in any attempt to turn Nissan around.
Poor personnel policies mean that the best and brightest don't get to tackle Nissan's problems.
After turning around Nissan's deeply troubled U.S. operation, Minoru Nakamura was shown the door. You can't get a plausible reason why from the Nissan North America folks, but here's the most likely reason: age. In June, Nissan broomed all directors (except President Yoshi-kazu Hanawa) over 58, including Nakamura, and promoted a bunch of new faces aged 54 to 58.
Bringing in new faces and younger ideas sounds good. But why not base promotions on merit? If a 62-year-old manager does a great job, keep him. If a 49-year-old flubs, remove him.
Resistance to change and cost controls runs deep in the Nissan corporate culture. That is especially true in engineering, where Nissan consistently has done what it wanted to do, free of the market's influence.
Consider the new Maxima. When Nissan engineers introduced it to the press last year, they boasted that its interior was exclusive to the Maxima. But wait, hasn't Nissan said it was getting rid of its 28 different steering wheels to respond to customers' cost sensitivity? Oh, but the Maxima's interior was engineered when Nissan could afford the cost, came the reply.
Baloney. Nissan has lost money in six of the past seven years. I don't care when the Maxima engineers did it, they should have been told to keep a lid on costs.
It's not just the engineering folks, either. All through the company, there's a halfheartedness for the reform effort.
In Japan, Nissan is combining its four sales channels into two, but officially it does not expect any outlets to be closed, even though some may be only a block apart. And when Nissan recently announced it was disposing of its holdings in nine cellular phone companies, it could not bring itself to use the word 'sell' even once in its four-page press release. It was 'transferring' the shares.
Does that sound like a company struggling to stay alive?
Nissan is restructuring, whether or not it can bring itself to say so. Hardly a week goes by without news of another sale, be it shares of an affiliate, land or entire businesses. The old keiretsu ties don't matter anymore.
In addition, it is axing its bloated product lineup in Japan, shedding the Largo, Leopard and 180SX, among others. Here, actions speak louder than words.
It finally recognizes that styling matters. After a decade of cars designed by committee, Nissan has some head-turning models. It is giving more rein to its California design studio, so models for the U.S. market are more in tune with U.S. tastes. If that is happening already, just wait until some of Renault's creative styling juices start to spread at Nissan.
It will have government support from Tokyo and Paris. Bureaucrats wield enormous power in red-tape-bound France and Japan. Both governments want Renault-Nissan to succeed, so Nissan will enjoy a playing field tilted heavily in its favor.
Ghosn knows how to drive change. When the Brazilian-born manager arrived at Renault from Michelin North America in 1996, he had few allies at the French company, yet he turned it around in less than three years.
Those same skills will work at Nissan. Ghosn already is talking to employees in Japan and abroad, seeking ideas on returning Nissan to the black.
Ghosn is disarming, frank, direct and scrupulously punctual in a way that clearly says he intends to get the job done today, not tomorrow. If he has to slay some of the last sacred cows, say by closing a plant, he will.
He just might pull it off.
James B. Treece can be reached via e-mail at [email protected]