TOKYO - Carlos Ghosn's plan to save Nissan Motor Co. Ltd. will spare all but a few U.S. jobs while cutting 21,000 globally.
Last week, Nissan's COO announced plans to bolster North American production while shutting five plants in Japan. He promised to bring a wider variety of cars and trucks to the United States, and he vowed to breathe new life into Infiniti, Nissan's luxury division.
Although it escaped the brunt of Ghosn's cuts, Nissan North America Inc. and those who do business with it will shoulder more responsibility.
Suppliers, for example, will have to prove themselves if they are to survive cuts in Nissan's global purchasing ranks. And ad agency TBWA/Chiat Day will compete for a single global Nissan contract.
Nissan's U.S. sales operations will have to swallow some medicine, too. In the next five weeks they must decide how to reorganize field offices without affecting service to dealers.
In the past, Americans could blame Japan for products that missed the mark in the United States. Exhibit A: the Nissan Axxess. Now, no new products will arrive without U.S. blessing.
If products flop, Nissan in North America will have no one to blame but itself.
The changes are part of the long-waited Nissan revival plan announced here last week. The architect of that plan is Ghosn, who handled mobs of journalists and photographers at the Tokyo auto show with the aplomb of a rock star. When he outlined his recovery plan, he did not mince words.
'Nissan is in bad shape,' Ghosn said.
Of course, the recovery plan is the easy part. Carrying it out is another matter. Here's how it will affect Nissan's operations in North America:
New products: Nissan will pump more products into its Infiniti Division in an effort to make it a top-tier luxury franchise. The company promises to shore up weaknesses in Nis-san Division's minivans, sports cars and pickups.
Worldwide, Nissan will cut costs by designing global platforms, some of them to be developed with Renault. One possible candidate is Renault's Avantime concept minivan. How-ever, Renault will badge it as an Infiniti only if Nissan North America asks for it.
'Product development,' said Ghosn, 'will be at the heart of Nissan's revival. ... There is no problem at a car company that good products can't solve.'
Fresher products: Nissan vehicles now arrive at U.S. dealerships 12 to 18 months after they are launched in Japan. Within three years, Nissan expects to reduce that lag to three months.
Higher transaction prices: In the United States, Nissan products on average sell for $1,000 less than comparable models from competitors. Heavy discounting is to blame. The company wants to slice that difference to $650 over the next three years and erase the difference over the next decade.
Fewer suppliers: Nissan will replace regional vendors with global suppliers. North American suppliers stand to benefit.
Purchasing accounts for 60 percent of Nissan's total costs. The company counts on lower parts prices to provide its biggest and most immediate savings.
Ghosn aims to reduce worldwide purchasing costs by 20 percent over three years.
'Don't wait until April 2000, or your place may be taken already,' Ghosn advised suppliers. 'The first ones who commit in a credible manner - not lip service - will sign contracts.'
North American assembly: Renault will return to the Mexican market. Renaults will be built at one or both of Nissan's underused Mexican plants.
Nissan will support the creation of a Renault distribution network, and Renault Credit International will set up a finance company to serve Renault and Nissan dealers in Mexico.
Nissan is the only major carmaker in Mexico without its own finance arm. Renault pulled out of the Mexican vehicle market in 1986.
The Renault marque itself won't return to the United States, officials insist.
Global advertising: Nissan plans to name one advertising agency to handle a new, global account. Its mission would be to promote a global brand image, a key element in the recovery plan. A U.S. brand management consultant, Larry Light, is helping Nissan define that image. That study will be completed by year end.
One eligible candidate is Nissan's longtime agency, TBWA International, which handles $800 million in annual Nissan billings in 24 countries. Other U.S. ad agencies would be expected to bid, too. However, Ghosn said that the head of worldwide advertising will be based in Tokyo, which could give the inside track to a big Japanese agency.
More r&d: At least 500 people will be added worldwide as Nissan bolsters its vehicle and engine lineup. Some of them will surely go to U.S. technical centers in Los Angeles and Farmington Hills, Mich.
Those operations will have a voice in shaping every product sold in the United States. Historically, products developed in Japan have come straight to the United States without any input from America.
Information systems: Nissan North America has turned over its information systems operations to an outside contractor. The name of the company is expected to be announced this week. The move is expected to save about $40 million annually, said Nobuo Araki, president of Nissan North America.
Reorganized regions: Nissan North America must devise a plan to streamline regional operations by Dec. 1. The company has seven Nissan regions and three Infiniti regions. Dealers won't be affected, said company spokesman Jason Vines. 'We are not going to get rid of anything that will impact the dealer,' he said.