January 2003. I’m talking with a senior auto industry analyst about Carlos Ghosn. “If it was announced Ghosn was about to take the top job at Ford,” he muses, “it would add $10 billion to the value of the company.” He pauses just long enough to ponder a pile of greenbacks larger than the GDP of several small Caribbean countries, then delivers the punchline: “Overnight …”
Ghosn became the auto industry’s $10 billion man for one simple reason: He had saved Nissan. In 1999, Japan’s second-largest automaker had been a basket case. Its share of the Japanese market had been shrinking for 26 years, and only two or three of the 48 vehicles it built were profitable. Buckling under $20 billion of debt and teetering on the brink of bankruptcy, Nissan had been humiliatingly forced to seek an alliance with Renault to survive.
For Renault boss Louis Schweitzer, Ghosn was the logical choice to take on what many believed was a near-impossible task. A Brazilian-born Lebanese, Ghosn graduated as an engineer from France’s elite École Polytechnique before joining tiremaker Michelin in 1978 and jumping to Renault in 1996. A bristling, bustling ball of energy with a hair-trigger intellect and an outsider’s disdain for establishment norms, Ghosn was the change agent Nissan needed. He was appointed chief operating officer in June 1999.
Once in Tokyo, “le cost killer” wasted no time shooting sacred cows. “When I joined Nissan,” Ghosn said in 2003, “everyone explained its weakness by the state of the yen, the collapse of the bubble economy, etcetera. I said that was baloney. The problem with Nissan was inside Nissan. When you start looking outside for excuses, that’s when you’re in trouble.”
Ghosn ignored the arcana of Japanese business etiquette, shaking hands with every employee he met, making English the company’s official language, and brazenly poaching Shiro Nakamura from Isuzu to be Nissan’s new design chief. He dismantled entrenched internal fiefdoms by installing cross-functional management teams that cut across the traditionally compartmentalized engineering, finance, sales, marketing, and manufacturing departments.