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Old 07-23-2002, 03:52 PM   #1
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Post Forbes: Ghosn Talks about Nissan's Revival

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from Forbes.com article: Gambatte! ; by Benjamin Fulford; 07.22.02
Carlos Ghosn transformed Nissan. You ain't seen nothing yet, he vows.

Until recently the role model for managers at Japanese companies was General Electric's Jack Welch. Now there's a new hero to talk about: Carlos Ghosn, the outsider brought in to rescue a nearly bankrupt Nissan Motors in 1999. In three years Ghosn shrank the payroll by 29,000 workers, cut the company's roster of suppliers by 60% and revived the line-up of new models. For the six months to Mar. 31 Nissan's 9.3% EBIT margin (profit before interest and taxes) was better than the latest annual ebit margins at any of the world's 11 other mass-market automakers.

Chapter two of the Ghosn saga has just begun. It could be as exciting as the first. The plot line: Ghosn takes his global car-production techniques to Renault, the French firm that bailed out Nissan with a $7 billion cash infusion, installed Ghosn and owns 44.4% of Nissan's stock. Ghosn, 48, is scheduled to be elevated to chief executive of Renault in 2005 while retaining that title at Nissan.

The voluble Ghosn relishes his fame as a turnaround magician. Says he: "The Japanese public sees in Nissan a company that is representative of problems that many Japanese corporations face. The fact of turning Nissan around in a clear, neat way is a strong message of hope in Japanese society. People stop me in the street and say gambatte [go for it!] and wish me luck."

How did he do what he did? By having a "near-death experience," Ghosn says, Nissan discovered excesses that more routinely profitable companies let pass. Nissan, whose $50 billion in annual sales makes it the seventh-largest auto company (just behind Honda), managed its transformation while relying on cars designed when it was a cash-strapped basket case. This year will be the most dramatic so far in the rehabilitation, with a dozen models produced under star designer Shiro Nakamura (poached in very un-Japanese style from Isuzu Motors).

Not everything will go smoothly. Nissan's remodeled Altima, designed by American Bruce Campbell and just named North American car of the year by an association of automotive journalists, has drawn more than its share of complaints about manufacturing defects. The knocks caused Nissan overall to fall to sixth in the J.D. Power ratings of initial customer satisfaction, below Detroit's Big Three. "We're naturally disappointed," says Emil Hassan, who must address the issues as quality chief for Nissan North America.

North American sales of Nissan's top-end Infiniti, meanwhile, were up 34% in May from the year-earlier month, thanks to a redesigned line called the G35. Although Infiniti still badly trails marques like Lexus, BMW and Mercedes in this important market, Nissan officials say that more focused marketing and better design will change that.

In Japan, the March, a compact car with e-mail capabilities, became the first car to be built using a common chassis with Renault. By globalizing design in this fashion, Ghosn says, Renault and Nissan can each save 20% on development costs. The March has received at least 55,000 orders in the not-quite three months since its introduction, making it the third most popular car in Japan.

If you want a sense of what globalization is all about, look at Nissan. Ghosn had to bridge four distinct cultures, at the French Renault, the Korean Samsung Motors (a troubled Korean automaker bought by Renault in 1999), the Japanese Nissan and the very Americanized Nissan North American operations.

"Going truly global gives you a huge advantage, but it is difficult to implement," says the Brazilian-born, Lebanese-raised, French-educated boss. Ghosn was able to draw on his experience in turning around a militantly unionized work force at a Goodrich Uniroyal plant in the U.S. after he was put in charge by owner Michelin in 1990. There he was able to convince most unionized workers that avoiding rigid job definitions was in their own interests. The key, he says, is to stamp out "emotional parasitism," or defining anything different from your way as wrong.

This philosophy was put into practice by Kouji Hori, the head of the French/Japanese team that put together the March. When his engineers came to look at the platform their Renault counterparts put together, they were pleasantly surprised by innovations that made the ride smoother and the car more maneuverable. At the same time, though, the Nissan engineers thought the overall result looked "clunky" and had room for improvement. "It took a lot longer to put together than if only Nissan engineers had done it, because we had to have regular meetings to iron out differences," says Hori, 49. But, he continues, the end result is clearly better than anything Nissan could have produced on its own.

Renault, though, has yet to reap the full benefit from its own investment in improving Nissan. Nissan now has a market capitalization that is double that of Renault, even though Renault owns that 44.4% share of Nissan, while Nissan owns 15% of Renault. The implication is that investors view Renault as pretty close to worthless apart from its ownership of Nissan shares.

"Renault has already given a lot in terms of best practices, people, management, etc., to Nissan," Ghosn says. "And now Renault is taking some of Nissan's skills in terms of manufacturing, engineering and management of quality. We are not at our full potential in terms of synergy. We have established common platforms, but until we market them we get no benefit. March is the first and Cube, another Nissan small car, will come later in September. But Renault cars will not come until much later."

Nissan expects its European sales to stay flat this year but to enjoy a rise of 6% in Japan and 6.2% in the U.S. even though it foresees the total U.S. market shrinking. Ghosn aims to add 28 Nissan models and boost sales by 40% by 2004, while cutting costs by 15% and regularly posting an EBIT margin of 8%.

The early signs are good. Nissan is selling all the Altimas and Marches it can produce. Other new cars are also posting double-digit sales growth. To help sell more, Nissan is building big new facilities in Smyrna, Tenn. and Canton, Miss. In Japan the capacity utilization of its plants has gone from 51% two years ago to 75% today.

Nissan is hiring 1,000 engineers in Japan to design those new models and work on power trains, including some using fuel cells. "Nissan is reconstituting its technology, rebuilding its brand. This is not theory, this is fact, this is reality," Ghosn says. There's a little bit of hubris in this kind of talk--but Ghosn is entitled to be boastful.
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Old 07-24-2002, 11:42 AM   #2
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Thumbs up

I got to be blunt and honest with everybody here - I am very biased towards Nissan.

Nissan has been my favorite make since early childhood and it still is. I feel closer to Nissan than any other manufacturer out there, not being too fond of Toyota or Honda as the corporations go, but I got to give them props for being good corporations and creating wonderful cars (especially Toyota, some of the high end luxury cars, such as the Lexus SC430 and LS430 are produced by a team of 5 people I believe, in a tatami room, where they can't even wear shoes.)

I wish all the best to Nissan and Ghosn and I hope their ride continues on with the up and coming 350Z, G35 Coupe, M45, Murano, and eventually the GT-R.

The Nissan image is definately beginning to change in everyone's mind, I believe a lot of people are now associating Nissan with quality engines, good power, and good price. Although interior ergonomics and quality is definately something they should tackle.
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Old 07-24-2002, 10:41 PM   #3
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I also like Nissans, my mom had a 91 Stanza for 9 years/300000km, with almost no problems. Now she might get a Sentra.
Anyway, Ghosn is doing good except for one thing: Making the new Skyline share a platform with the 350Z, G35, and future Maxima. Also, they are getting rid of the inline 6. Very bad
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Old 07-24-2002, 11:23 PM   #4
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I am pretty sure they are not going to get rid of the inline 6, at least not in Japan. The most feasible rumor that I heard was that in Japan, GT-R buyers will have an option between an inline 6 and a V6.
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Old 07-25-2002, 12:19 AM   #5
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Quote:
Originally posted by Chris
...Making the new Skyline share a platform with the 350Z, G35, and future Maxima...
To my knowledge, there are no plans to put the Maxima on the same platform with the Skyline/G35 and 350Z. It's going to be redesigned for 2004, and it'll go on the Altima's FFL platform.
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Old 07-27-2002, 03:30 AM   #6
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Wow, I feel kinda wierd posting among all you mods. I just wanted to say cheers for Nissan. I had a real hard time choosing between my BMW and an Infiniti I30. Nissan's rule!
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Old 07-27-2002, 05:48 PM   #7
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Quote:
Originally posted by igor@af
I got to be blunt and honest with everybody here - I am very biased towards Nissan.
...
This is no secret..AF's front page news summary:
Automotive News Desk
Something about Nissan
Imitation AF websites
Partnership with Importstrip.com
Team Acclr8 item
Something about Infiniti
Automotive Articles debut
AF B-day party
Something about NISMO, aka Nissan
Something about Nissan Skyline
Something about Acura RSX
Something about Dodge Viper
Something about Nissan 350Z

So that's Nissan=5, AF site related=5, other=4


I am so impressed with Nissan right now..if you look at what they've done with the company in the last 2 years, it's just amazing. I have been partial towards Nissan ever since I bought my Sentra, which was absolutely the best first car anyone could ever have, ever. I drove it for a year and 4 months, and after it was totalled, I sold it to a co-worker's father who's fixed it up and is driving it some more. That car had 186k on it when it left my hands, and it looked better (and ran better) then than a lot of cars do with half the mileage.

I have been watching Nissan's stock prices, and they have doubled since September, while the rest of the economy has plummeted. Ghosn and his team have taken a company that made great cars, to a company that makes excellent cars, and sells them at great prices, but still turns a profit too. According to Towbin Infiniti, the G35 has been 'selling like hotcakes', and no wonder. This is a car that beat the BMW 3-series in two independent reviews, for about $7,000 less, and without the dated styling. I could not be prouder right now to own an Infiniti, and I could not be more impressed with the company. They achieved their revival plan in 2/3 the planned time, and are now hard at work continuing that achievement with the Nissan 180 plan. Congrats to Nissan. They have deserved for years the critical acclaim that has just began to be bestowed upon them.
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Old 07-27-2002, 09:48 PM   #8
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Quote:
Originally posted by boingo82

This is no secret..AF's front page news summary:
Automotive News Desk
Something about Nissan
Imitation AF websites
Partnership with Importstrip.com
Team Acclr8 item
Something about Infiniti
Automotive Articles debut
AF B-day party
Something about NISMO, aka Nissan
Something about Nissan Skyline
Something about Acura RSX
Something about Dodge Viper
Something about Nissan 350Z

So that's Nissan=5, AF site related=5, other=4



Damit, I was hoping nobody would notice... :cwn27:
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Old 07-27-2002, 10:56 PM   #9
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Quote:
Originally posted by Hudson


To my knowledge, there are no plans to put the Maxima on the same platform with the Skyline/G35 and 350Z. It's going to be redesigned for 2004, and it'll go on the Altima's FFL platform.
Brain fart their But at least they are similiar in size, and the I30 is based off of the Altima, and the G35, while much sportier, is kind of a replacement for the I30, so thats what messed me up.
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Old 07-28-2002, 11:06 PM   #10
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Great Idea!

Af Moderators,
This addition to the site was an excelent idea. This is only my 4th day of being registered on the site but I like this as a selection of the many forums available. I like keeping up with whats going on in the automotive industry and this is an excellent place for me to keep up with things.

As you may be able to tell I am a big toyota fan and in my opinion the 2JZGTE 2997cc(3.0) Inline 6 was the greatest engine to come out of a production vehicle, but I have much love for Nissan. I almost purchased a 300ZX in lien of my 96 Trans Am but I went with the TA because its much more power for less money but albeit she is a domestic(which I am not crazy about) she has treated me fairly. I am very happy about Nissan's turnaround and am very intrigued by their announcement of releasing the 350Z. It should be a great performer in its class. Take care all and I will see you on the board!
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