Every discipline has The One.
The One displays exceptional talent, pushes beyond peers, is driven by an unseen force to succeed. Mere achievers become scientists and lawyers; The One earns Nobel Prizes and Supreme Court seats. A superb athlete makes an Olympic team; The One wins multiple gold medals.
Not every musician who can strum a lick becomes a rock ’n’ roll star. In the car business, a multitude of talented executives devote lives to the industry, yet the majority forever labor outside the klieg lights, just a pickin’ and a grinnin’ and playing backup.
Carlos Ghosn is a bona fide center-stage star, though chances are you wouldn’t recognize him were he standing next to you in line at the local video mart. Ghosn seems to like the relative anonymity the United States affords him, which is 180 degrees from the recognition he receives in Japan, South America or Europe. But that’s going to change. Ghosn is about to make it big in this country.
Ghosn—say “Gohn”—earned his stripes the way many white-collar types do, by his smarts and by investing many exhausting hours for Michelin and Renault. He was named commander of Nissan, however, for his ability to do things no executive before him had tried: executing difficult and life-changing decisions, the kind of radical surgery that ultimately pulled Nissan away from a looming demise.
Though not an imposing figure, Carlos Ghosn's bearing commands attention (PHOTOS: Jim Marshall)
And then he made decisions. Ghosn cast Nissan as a United Nations of talent whose workers are inspired, whose products are polarizing and whose practices lead the business world.
No wonder Wall Street has perked up and taken notice. Why this matters: Having focused attention on Nissan’s other global businesses, Carlos Ghosn has his sights set on making Nissan’s North American operations even stronger and more profitable than they already are.
You’re about to get to know the man who will ultimately become king of both Nissan and parent Renault, and you’ll do it from the inside looking out.
AutoWeek, a sister publication of Automotive News, spent the better part of 30 hours following Carlos Ghosn as he made his first prolonged visit to the States following his ascent to the U.S. throne. On his action-packed agenda were an advertising agency review, a dozen internal personnel meetings, a presentation to financial analysts, and a global gathering of automotive journalists brought in to look at every vehicle Nissan has in dealerships now and into the near future. It’s just another day in the life of Nissan’s gaijin samurai warrior.
Ghosn calls his methodology “transparency” and sees no reason to think it cannot apply in the U.S. lab. As he implements it, the bigger question is whether Ghosn has created a template other U.S. companies would do well to follow. His modus operandi is not merely the cut-and-slash of corporate executioners; Ghosn precedes excisions with thoughtful discourse from myriad and diverse groups called Cross-Functional Teams—CFT—charged with identifying solutions and bringing them forward.
For instance, representatives from design, manufacturing, sales and marketing, purchasing, government affairs and human resources may be charged with figuring out how to build a green-field factory that produces multiple vehicles in the same plant—clearly a conversation that would not generally pull in such an eclectic group.
Ghosn believes this corporate empowerment decentralizes critical information gathering to those who ultimately must implement it, a move that softens the soil for seeds of change and earns broader buy-in from the troops. It’s not window dressing, either. Only after a CFT makes its recommendations does Ghosn make a decision.
Besides being methodical, mechanical and focused, all Ghosn cares about is making a profit, period. Businesses with deep pockets can spend money chasing market share, Ghosn says, but without profit a company is nothing.
Achieving profit is not always pleasant. Ghosn has closed manufacturing plants, severed relationships spanning generations and put people out of work. The short-term pain is mitigated by the long-term pleasure of having a healthy company. This samurai effect has worked on four company revivals in two different industries and in four countries. (For those keeping score, they are Michelin in Brazil, Michelin in the U.S., Renault in France and Nissan in Japan.) Ghosn, born in Brazil to Lebanese parents and educated in France, has such international influence that not only has a Japanese anime comic book been created about his seeming superhuman exploits, but he was also recently asked to run for president of Lebanon. Not bad for a 50-year-old, bridge-playing, self-styled homebody.
Ghosn’s is not an imposing physical figure, but his demeanor, clothes and bearing command attention and respect. He exudes confidence when he speaks; he shows few signs of wasted motion and fewer signs of wasted emotion. Those who work close to him say he listens intently to volumes of information and processes it like a machine. He approaches life similarly: Switch on, go to work, direct attention to task at hand, work hard, switch off. He is forever on the move—he averages 11 speeches a month—to the point where the company has offices for him in Paris and Tokyo and has secured a new corporate aircraft/office with the range to shuttle him globally.
Ghosn may call the openness of his and his company’s actions transparency. Everyone in his entourage calls it exhausting.
|10:45 a.m., Day 1: Ghosn listens to a pitch with Steve Wilhite, left, Nissan's director of global marketing, at TBWA/Chiat/Day|
Ghosn has been here for the better part of the morning, having first toured the ultra-hip agency. Present are vice presidents responsible for all the various media through which the Nissan message can be spread. Here, too, are executive creative director Rob Schwartz, and Steve Wilhite, Nissan’s director of global marketing. Wilhite spread magic at Volkswagen and Apple Computers and has been at Nissan for three years. He appears as a laid-back, soft-talking Californian, but don’t be fooled. This Hawaiian shirt-wearing Dead Head is ruthless in business and is a true marketing wizard; he recognized early the value of the breakthrough Mini campaign and challenged Nissan’s agency to do more with less. Why? Because Nissan and Infiniti together spend on order of $800 million on advertising and marketing in North America, and they’re fighting companies that dig into deeper pockets.
Ghosn listens to the Nissan pitch with Wilhite, Schwartz, and agency co-founder Lee Clow, among the crowd.
After the longer-than-planned presentation, employees gather in Chiat’s full-size indoor basketball court for a town hall meeting.
Here, Ghosn offers a glimpse of his talents: He speaks flawless English, one of five languages in which he conducts business. Whether addressing an entry-level gopher or a high-ranking producer, Ghosn connects with all. He will use idioms from one culture and drop them into another; they don’t sound odd, trite or out of place. He knows better. On the basketball court, he aims to make the point of his address—he doesn’t make a speech without a point—and into this room of advertising people he throws a Molotov cocktail.
|11:30 a.m., Day 1: Ghosn speaks at a town hall meeting at TBWA/Chiat/Day: "Brand management is fake."|
“We have people. And the company is strong because of people like you. You are doing a good job. [For you to] love the brand is extremely important for us. The U.S. has done the best job, and it shows in the presentation that the people working for it like the brand. And you even like it despite some of the people working for it... like your bosses.” Ghosn knows that with seriousness should come levity, and the joke lightens the mood before he bids adieu.
Before he can escape the genuine ovation, however, Ghosn is presented with an all-black surfboard, the word “Nissan” embossed on it. It is as much a straight line as anything, for when Ghosn is handed the board he’s told, “You are The Big Kahuna.”
Interesting, but you get the sense this is not something about which Carlos Ghosn needs reminders.
When Ghosn arrived at Nissan in 1999 he crafted with the help of his lieutenants the much-vaunted Nissan Revival Plan. Part of the plan called for Renault to invest $5.2 billion in cash and assume debt, a cumbersome enough load that it prompted General Motors product czar Bob Lutz to suggest the French would be better served to pile gold bullion on a barge and sink it in the Atlantic.
Ghosn himself admitted later that he figured saving Nissan was a 50-50 proposition. His Revival Plan cut the fat and kept the muscle, though much of it was atrophied muscle; after a strict diet and exercise, the company showed tone.
That accomplished, Ghosn set in motion another goal, another plan, this dubbed Nissan 180. Not only did the moniker suggest a complete turnaround, it also served as an acronym for 1 million extra sales worldwide, 8 percent profit margin and 0 automotive debt. Today, Nissan must only achieve that sales goal by October ’05 to make this a reality, and the company is on plan to do so.
If two plans are good, a third must be better. And so it is with Nissan Value UP, introduced more than a year in advance of its implementation in April. There is a three-year timetable for success. How many car companies show their employees—let alone the competition—what they will do four years out? Again, Ghosn’s transparency aims for everyone to be clear where the train is headed and he wants to know that everyone is on board.
12:30 p.m., Day 1, Ritz-Carlton: Ghosn has taken time over, around and through a working lunch for a series of private meetings to discuss delicate human-resources problems with department heads from Nissan U.S. headquarters. Before he steps in to assume America’s reins, he wants to know all that is going on with these shores. He is “downloading” information at a broadband pace.
Carlos Ghosn sits and listens and often his subtle but animated facial expressions belie his thoughts. He asks many pointed, direct questions. Those who work with him are amazed at his capacity for assimilating data. Once he has digested a problem, he is like the anaconda that swallowed a goat—everyone else is watching what he has just done, but he is moving on to the next meal. Ghosn has no problem making decisions quickly and decisively.
6:10 p.m., Day 1, Marina del Rey: This evening he meets with business analysts, an event organized by Merrill Lynch in a Ritz-Carlton conference room overlooking Southern California’s tony harbor community. It is an idyllic location for a luxury hotel with palm trees framed against a cornflower blue sky, but Ghosn pays no attention. He is here to speak to this influential audience, a group of men and women whose buy and sell suggestions can sway billions in investments.
The analysts have spent the morning and afternoon with Honda and Toyota, inspecting facilities and learning about abilities. Now it is Nissan’s turn.
Merrill Lynch’s John Casesa welcomes Ghosn with flourish and humor. By way of introduction, Casesa relates a story that he was at the 1999 Tokyo Motor Show press conference where Ghosn was introduced as Nissan’s gaijin savior. As Casesa gazed into the local pro-Nissan crowd to watch them digest this information, he offered that, since the analyst would bet on a short-lived effort, Ghosn was only renting his apartment. Ghosn takes the lectern and counters he had, indeed, rented... but wished he had bought, considering how real estate prices soared. The comeback delights these numbers guys.
Ghosn, easy with the crowd, talks about the latest Nissan plans. He rattles off numbers on the company, on margins, on exchange-rate risks. His market fluency is apparent to these experts, and they appreciate him speaking in their tongue. He says repeatedly he is not interested in gaining market share, but wants profit. No car will be built that is not profitable; a car can only be profitable if it sells well; if it sells well, it will gain share. An automotive circle of life.
“If we hit [our sales goal] in every product, we would not make 11 percent, we would make 20 percent.”
Ghosn takes questions from the floor. He listens attentively and answers thoughtfully. Transparency mandates that he talk about good and bad with equal forthrightness. Analysts zero in on a J.D. Power Initial Quality Survey (IQS) showing Nissan’s newest plant in Canton, Mississippi, struggling to meet quality standards. This factory, with untested workers, suppliers and product, has been designed to manufacture a herd of distinct products—the Nissan Quest minivan, Titan pickup, Pathfinder Armada, and Infiniti QX56 luxury sport/utility—in the same plant.
Ghosn isn’t making excuses. “This industry is brutal,” he says. “You have to be ready to take on any future challenge.” To that end, and to show everyone within the corporate culture that shoddy workmanship would not be tolerated, a swarm of 200 engineers descended on Mississippi to address the problem—within 48 hours of it coming to light in the IQS report. Ghosn The Fixer at work.
More questions. “I am more optimistic about the U.S. market than I am about the Chinese market”; and “I don’t see further consolidation in the U.S. market.”
Renault in U.S.
Will Renault come to the United States? “As president of Nissan, I don’t know. As future CEO of Renault, I will have to take a look at the numbers. The U.S. can break a company that wants to come here, and any single company has to look at the U.S. market because of what it has to offer.”
Will Renault products come to the States via Nissan? “Renault will develop cars for Nissan, particularly a diesel. Nissan will develop a 4x4 truck for Renault. The only thing you cannot do is to confuse the brand. You will see two different skins, two different products on the same platform.”
How much do you worry about Detroit? “When you have a low-margin situation, you look at how to make it higher. You will be surprised at how quickly the Big Three will respond.” Ghosn is one fighter who doesn’t sell opponents short.
“What did I see in ’98 that made me think the company could work?” he asks rhetorically. “I thought there was a 50 percent chance of success. I didn’t think, frankly, that we had a choice: In 1999 DaimlerChrysler was courting Nissan and Mitsubishi. GM had its Asian positions and Ford was with PAG. You look at the competition and when you are cornered strategically, you take more risks.”
Later Ghosn comments on how astute the questions were and how he was impressed with the analysts’ perception of the Nissan hierarchy. This company, they will tell him, is the most globally and culturally diverse in the business and it is to Nissan’s benefit.
10 p.m., Day 1, flight to San Francisco: Nissan 360 is a program designed to educate not just the world’s press and automotive analysts to what Nissan has in products spread throughout the world, but an event also for some of its key employees. For a month, in three-day waves, visitors come from all corners of the world to meet the cars Nissan has in its various markets, and to meet some of the people behind them. Ghosn attends this wave, 10 days into the event, which includes a dozen Britons, some Brazilians, some French as well as executives from Nissan U.S.
One on one, Ghosn will answer all constituents and do so in their native tongue. For the Brits, he will tackle the possible closing of a factory; the French want to know Renault is secure. The American execs would like nothing more than to have answers to how their lives will change under the white-hot scrutiny of Carlos Ghosn.
|2:45 p.m., Day 2: More media: Journalists from Brazil, the United States, United Kingdom and Japan grill Ghosn.|
Ghosn scowls at four scribes who come to the room late but stays on message without skipping a beat. He knows, and now they know.
|11:45 a.m., Day 2: Employee interview: Sausalito Yacht Club parking lot, Sausalito, California|
“The Cube, and all our products, we aren’t going to push. Our objective is not to make growth. Our objective is not to make market share. Our objective is to be profitable.” Sense a theme?
When the inevitable question from England comes, Ghosn does not sugarcoat the answer. “We are not in the business to build cars to keep people busy within the company.” Take that.
|12:20 p.m., Day 2: Mediat star: CNN asks questions in Sausalito, Calif.|
For the rest of the morning and into early afternoon at the chosen test-drive site in Sausalito, Ghosn is a universal media darling. He speaks to Brazilian television in Portuguese, conducts several French TV interviews—in one, he himself chauffeurs the camera crew in a huge ute—and he chats to CNN’s audience in market-speak. When there is time he chats to his own people with humor and warmth, perhaps because this event is going so smoothly. Ghosn, though, proves he is not without spontaneity: At a lull in the schedule, Ghosn says he would like to take a convertible Z for a spin around this quaint Northern California town. Faster than if you greased a valet a $50 bill, a car is produced and the top is dropped, opening up to the sun. Carlos Ghosn speeds away, a grin forming on his face.
|2:45 p.m., Day 2: Interview in an Infiniti QX56: From Sausalito, California to Fisherman's Wharf, San Francisco|