Ghosn - Nissan and Renault

Excerpts from an article of CNNMoney

Ghosn began shuttling among three countries and three cultures as a kid. After his birth in Brazil to Lebanese parents, he moved to Lebanon at 6. Educated by Jesuits in Beirut, he attended college in Paris, graduating from two of France's most prestigious universities.

In 1978 he joined Michelin, the French tire manufacturer. By 1990 he had risen to head North American operations and oversaw Michelin's restructuring following the acquisition of Uniroyal Goodrich. Despite his success, Ghosn recognized that his advancement at the family-owned company had come to a halt, so he moved to Renault in October 1996 as executive vice president for purchasing, manufacturing and R&D. Following a string of cutbacks and plant closings that he engineered, he became known, affectionately, as "le cost killer." In 1999 he was sent to Japan to run Nissan, in which Renault had obtained a 36.8 percent stake.

After years of bad management, Nissan was all but bankrupt. Ghosn came in and upset traditional practices, becoming a major celebrity and a comic-book superhero in the process. He announced the end of seniority promotions and cross-shareholdings with other companies, set strict financial targets and declared he would resign if he didn't meet them.

Today he is as focused on the global competition as he is on alliance possibilities. "There is no doubt they will be coming to the U.S.," says Ghosn, leaning toward his listener to make a point. He is referring to the Chinese and Indian vehicle manufacturers that will soon hit the U.S. market.
He's even planned a strategy for them: "I was sitting down with my team and I said, 'If I were a Chinese company, how would I come to the U.S. market?' It's very simple. I would come with a very cheap car. There is practically no car selling at less than $10,000 in the U.S. market."

What is miraculous to him is Toyota's consistent ability to execute in an operationally complex business without making many mistakes. "From time to time when you miss something, you're getting punished for it. If you miss two things, you're getting harshly punished. If you miss more than two things, then you start to be in serious trouble."

Not Toyota. Without mentioning the company by name, Ghosn ticks off the list of qualities that make it successful: a learning organization, humble in front of its customers, using profit as the only meaningful indicator.

Ghosn knows about mistakes. He championed Nissan's decision to locate its newest U.S. plant in Mississippi and then violated several industry principles by starting production of four all-new vehicles with an all-new workforce. Quality problems surfaced immediately and continue today; Consumer Reports refuses to recommend any of the four vehicles built there because of poor reliability. Ghosn says that the quality problems stem from three or four years ago and that he's confident they will be erased.