Ghosn: "Cost Killer" in the Automotive Industry

In 2007, Nissan, Japan's second-largest automaker, was a key year for implementing the Nissan Value-Added Program. To this end, the new goal set by Dongfeng Nissan is to achieve sales of 300,000 vehicles at a 48% annual growth rate.

Carlos Ghosn once said that Nissan’s time to enter the mainland of China is indeed a bit late, but as long as the daily production capacity in mainland China introduces new cars that are made by local factories and affordable to the public, they can catch up in 4 years. The first to enter. For the Chinese market, Nissan placed heavy emphasis on its models across various market segments. Ghosn's words are being verified: despite a slight decline in the performance of Nissan in the global market last year, it has achieved good results in the Chinese market.

Who is Carlos Ghosn? Yes, he was the most "shocking" company in his history and he reorganized his business. In just two years, he left the precarious Nissan car out of bankruptcy and turned the French into a profit.

Renaissance Nissan

Ghosn is a Lebanese descendant born in Brazil. After entering the corporate world, he has “saved” four companies in Brazil, the United States, France, and Japan. The most famous of these is Nissan. As a Westerner, Ghosn succeeded in transforming a giant Japanese company with conceptual obstruction and conservative style, fully demonstrating the shining glory of its commercial superstar. Earlier, Ghosn worked at Renault Motors in France. When Renault CEO Lewis Schweitzer looked for the number two figure to revolutionize the company, Ghosn became the best candidate. He made stringent demands on suppliers and business units and became famous for saving $1.5 billion in costs by shutting down multiple factories. This was called a "cost killer."

However, in 1999 when Ghosn took over Nissan Co., which suffered losses for seven consecutive years, the rich international background made him highly respect the Japanese corporate tradition. After taking office, he did not immediately display his strong grip on Renault. It took a while to wait until it was skillfully achieved through retirees, personnel movements and other means to lay off more than 20,000 people, making Nissan's more than 10,000 suppliers cut by half, leaving behind a request to cut prices by 20% within three years. At the same time, Ghosn was trying to break the traditional qualification system of Japanese companies, and western companies’ management and reward systems such as stock options were introduced into Nissan.

In addition, Nissan also manufactures textile machinery, aviation products, and marine machinery in addition to automobile and auto parts. However, these businesses lack technical advantages and caused a large amount of capital investment and losses. Ghosn established nine projects two weeks after taking office. The team is responsible for business development, procurement, logistics, R&D, marketing, and finance. In the first year of implementation, Nissan made a profit of 2.7 billion U.S. dollars. In fiscal year 2001, it was a sales record of 48 billion U.S. dollars and a profit of 2.9 billion U.S. dollars. As a result, Ghosn has won the respect of Nissan and even Japan. This made Reynolds also very "hearted" to him: April 29, 2005, Ghosn assumed Renault's president and CEO, while continuing to serve as Nissan CEO, this became the Renault-Nissan alliance's family.

face the challenge

However, after being the CEO of two multinational companies, Renault and Nissan, and making the Renault-Nissan Alliance a few years later, new issues have now been placed in Ghosn's presence.

Not long ago, Nissan announced the latest financial reports. According to the data, Nissan reported global sales of approximately 19.5 billion U.S. dollars in the fourth quarter of last year, and its product sales volume was approximately 795,000 units. Sales volume decreased by approximately 3% from the same period last year. Therefore, new vehicle sales may not reach the sales target of 3.73 million units throughout the year. In addition, the company’s net income fell to 104.5 billion yen in the fourth quarter of last year, compared with 135 billion yen in the same period of last year. Affected by this, it is expected that Nissan’s profit in fiscal year 2006 (March 31, 2007) may be only US$3.83 billion, which will be Nissan’s first profit decline in seven years. In this regard, Ghosn did not shy away, he admitted that the current Nissan situation is not good, but it is ready to meet the challenge.

With regard to speculation that Nissan’s sales and profit conditions will force Ghosn to give up one of Renault’s and Nissan’s CEO positions, the “management wizard” who had made a number of companies risky gave a negative answer. He claimed that the trigger for the crisis was in the first half of the fiscal year 2006. Nissan only launched a new model. It did not launch 6 models until the third quarter, and it only introduced 10 new models throughout the year. The slow progress in launching new models is one of the main reasons for the decline in sales volume.

Ghosn is looking forward to changing this situation to get a return on profits. He believes that 2007 will be better than in 2006. He will consider how to develop better both in sales and profits. Right now, Ghosn is making every effort to reverse the Nissan crisis. Just a few months ago, he spared no effort to invest in GM's alliance negotiations, although in the end the two sides failed to negotiate due to differences in the distribution of interests. Ghosn said that it is necessary to work harder to improve Nissan’s product sales and company profits, instead of thinking about other things. Because he knows that only through this difficulty can he maintain his previous reputation and even his position. "As long as I can get the trust of the two corporate boards, I will continue to be the CEO of Renault and Nissan at the same time," said Ghosn confidently. let us wait and see.