Legends of wheels Part II: Carlos Ghosn
Based on my previous article on Sergio Marchionne here -
http://boyracer.blogspot.com/2012/04/legends-of-wheels-part-isergio.html
Here is part II of 'Legends of Wheels' series based on another legendary icon in the automobile industry - Carlos Ghosn also known as Keiratsu killer, Samurai, Le cost killer, Mr. Fixit, Gaijin Hero and Seven Eleven. Fluent in French, Arabic, English and Portuguese -- and recently Japanese -- Ghosn is the quintessential international businessman. He is not only CEO and president of Nissan and Renault and AvtoVAZ, he is also on the board of Alcoa, Sony and IBM.
Born to French family living in Brazil, Carlos Ghosn is Director and CEO of Renault S.A., Nissan Motors and the Renault-Nissan Alliance. Ghosn began his career in the automobile field by working with Michelin for 18 years which is the largest tyre maker in the world. Ghosn was allocated the South American operations which were unprofitable and was supposed to report directly to Francois Michelin. Ghosn formed cross-functional management teams to determine best practices among the French, Brazilian and other nationalities working in the South American division.The experience in multicultural Brazil formed the basis of his cross-cultural management style and emphasis on diversity as a core business asset. The division returned to profitability in two years.
Renault
Renault was losing a billion francs a month and reported a deficit of 12.5 billion in 1984. The government intervened and Georges Besse was installed as chairman; he set about cutting costs dramatically, selling off many of Renault's non-core assets, withdrawing almost entirely from motorsports, and laying off many employees. This succeeded in halving the deficit by 1986, but he was murdered in 1986. He was replaced by Raymond Lévy, who continued along the same lines as Besse, slimming down the company considerably with the result that by the end of 1987 the company was more or less financially stable.
It was eventually decided that the company's state-owned status was detrimental to its growth, and Renault was privatized in 1996 and Carlos Ghosn was brought in. He soon cuased an uproar by shuttering a Renault plant in Belgium and wringing out billions in costs by leaning on suppliers and in-house units alike.
This new freedom allowed the company to venture once again into Eastern Europe and South America, including a new factory in Brazil and upgrades for the infrastructure in Argentina and Turkey. Renault also owns Dacia Motors with 99.43% owned by Renault, AvtoVaz owned 25% by Renault with plans to increase the stake to 50% and Samsung motors with a 80.1% stake.
When Renault CEO Louis Schweitzer ponied up $5 billion to buy effective control of Nissan that year, there was skepticism to say the least. Industry wags such as Robert Lutz, currently vice-chairman of General Motors Corp., publicly stated that Renault might as well have dumped the billions in the Pacific ocean. Into the breach came Carlos Ghosn, a savage cost-cutter and first-class intellect. But even he gave this salvage job only a 50-50 chance before leaving for Japan.
Renault Nissan Alliance
Renault-Nissan Alliance is a strategic partnership between Paris-based Renault and Yokohama, Japan-based Nissan, which together sell more than one in 10 cars worldwide. The companies, which have been strategic partners since 1999, have nearly 350,000 employees and control six major brands: Renault, Nissan, Infiniti, Renault Samsung Motors, Dacia and Lada. They sold about 8 million cars in nearly 200 countries in 2011, behind General Motors and Volkswagen for total volume. The strategic partnership between Renault and Nissan is not a merger or an acquisition.
The two companies are joined together through a cross-shareholding agreement. The structure was unique in the auto industry during the 1990s consolidation trend and later served as a model for General Motors and PSA Peugeot Citroën, PSA Peugeot Citroën and Mitsubishi, and Volkswagen and Suzuk, though the later combination failed. The Alliance itself has broadened its scope substantially, forming additional partnerships with automakers including Germany's Daimler, China's Dongfeng Motor, and Russia's AvtoVAZ.
Renault currently has a 44.3 percent stake in Nissan, and Nissan holds a 15 percent stake in Renault. Ghosn has compared the Renault-Nissan partnership to a marriage: "A couple does not assume a converged, single identity when they get married. Instead, they retain their own individuality and join to build a life together, united by shared interests and goals, each bringing something different to the union. The goal of the Alliance is to increase economies of scale for both Renault and Nissan without forcing one company's identity to be consumed by the other's. The Alliance achieves scale and speeds time to market by jointly developing engines, batteries and other key components. For instance, Renault builds nearly all of the diesel engines in Nissan cars sold in Europe. Nissan’s market share increases in Europe have been a result of badging various Renault van models such as the Renault Kangoo/Nissan Kubistar, Renault Master/Nissan Interstar, Renault Trafic/Nissan Primastar.
The Alliance also oversees purchasing for both companies, ensuring larger volume and thus better pricing with suppliers. The Alliance reported more than €1.5 billion in synergies in 2010. At the time it was created, Renault bought 36.8 percent of Nissan's outstanding stock, and Nissan vowed to buy into Renault when it was financially able. In 2001, after the company's turnaround from near-bankruptcy, Nissan bought a 15 percent stake in Renault, which in turn increased its stake in Nissan to 44.4 percent. The alliance has invested heavily in developing car markets such as India, Russia, Brazil and China.
In September 2009, Avtovaz announced plans to cut 27,600 jobs, more than a quarter of its workforce, after having been rescued from bankruptcy by a 20bn-rouble bailout from then Prime Minister Vladimir Putin during spring that year. with the Russian market having bounced back, there is a renewed willingness to invest. The Renault Nissan Alliance pumped money in the company for a 25% share.
A new production line was inaugurated last week in the Togliatti plant, backed by a 400m-euro ($525m; £330m) investment, and plans are in place to produce not only Ladas here, but Renault and Nissan models too. Lada and its Japanese and French alliance partners currently command a 33% market share in Russia. One major hurdle remains, however, namely Mr Ghosn's ambition to take a majority stake in Avtovaz. Deliveries by the two car companies and their Russian Partner AvtoVaz rose to 8.03 million vehicles in 2011, up from 7.28 million in 2010.
Nissan is one of the major car makers from Japan. Nissan became the second largest car manufacturer in 2011, surpassing Honda with Toyota still very much the dominant first. Along with its normal range of models, Nissan also produces a range of luxury models branded as Infiniti.
In 1999, with Nissan facing severe financial difficulties, Nissan entered an alliance with Renault S.A. of France. Renault purchased a 36.8 percent stake in Nissan. While maintaining his roles at Renault, Ghosn joined Nissan as its chief operating officer in June 1999, became its president in June 2000 and chief executive officer in June 2001. Under CEO Ghosn's "Nissan Revival Plan", the company has rebounded in what many leading economists consider to be one of the most spectacular corporate turnarounds in history, catapulting Nissan to record profits and a dramatic revitalization of both its Nissan and Infiniti model line-ups.
He took plenty of flak after slashing more than 20,000 jobs and closing assembly plants. When he joined the company, Nissan had debt of $20 billion and only three of its 48 models were generating a profit -- and reversing the company's sinking fortunes was considered "mission impossible.". Ghosn promised to resign if the company did not reach profitability by the end of the year, and claimed that Nissan would have no net debt by 2005. Ghosn determined that he had to slash purchasing costs by 20%, reduce capacity by 30%, close five plants and displace 20,000 odd-workers through lay-offs and attrition. An American CEO could do much of that in months, not so in Japan. In the late 90's, its public viewed the sale of national champions to foreigners akin to treason. Nissan belonged to a massic keiretsu -- a web of business alliances -- in which stability trumped sound financial management. It had billions of yen tied up in cross-shareholdings with suppliers and keiretsu partners. He also auctioned off prized assets such as Nissan's aerospace unit.
His radical methods would make him a “target of public outrage,” according to the Wall Street Journal. However, in one year, Nissan's net profit climbed to $2.7 billion from a loss of $6.1 billion in the previous year. Twelve months into his three-year turnaround plan, Ghosn had Nissan back in the black, and within three years it was one of the industry's most profitable auto makers, with operating margins consistently above 9% -- more than twice the industry average. Nissan's operating profit (EBIT, or earnings before interest and taxes) margin increased from 1.38% in FY 2000 to 9.25% in FY 2006.
He ended Nissan's reliance on an interwoven web of parts suppliers with cross-holdings in Nissan—a Japanese operating model called "keiretsu." He changed the official company language from Japanese to English and included executives from Europe and North America in key global strategy sessions for the first time.
In May 2005, Ghosn was named president and chief executive officer of Renault. When he assumed the CEO roles at both Renault and Nissan, Ghosn became the world's first person to run two companies on the Fortune Global 500 simultaneously. Post tsunami in Japan Ghosn has remained committed to building at least 1 million of Nissan's cars and trucks in Japan annually. Ghosn's ambitious recovery timeline -- with complete rebuilding of all damaged plants, and full production expected to be restored by October 2011 -- has put Nissan ahead of competitors such as Toyota.
Ghosn wrote a best-selling business book called "Shift: Inside Nissan's Historic Revival." He was the subject of another business book called "Turnaround: How Carlos Ghosn Rescued Nissan" by David Magee. Ghosn has also been responsible for Nissan's revival of the GT-R Skyline brand name with the 2007 Nissan GT-R which has successfully beaten the best performance cars from other Japanese stables incluiding the Mitsubishi Lancer EVO X FQ-400 and Subaru Impreza WRX STI
When Carlos Ghosn announced dedicating$5 billion to bring the Nissan Leaf (and numerous derivative electric cars based on the Leaf's architecture) to market—a gamble that prompted Business Week to ask whether he was "crazy." Not long ago, Nissan was being pilloried for a lineup with few hybrid options, as well as CEO Carlos Ghosn's stubborn insistence on investing in unproven all-electric technology. Among the skeptics: his own employees. The zero-emission Leaf, which Nissan began delivering in late 2010 in the United States and Japan, is the world's first mass-produced electric vehicle. As per Carlos Ghosn the first electric cars were awful. They were selling for $100,000. Then there is the Volt, which is $40,000. This is $25,000 [after government incentives].
http://en.wikipedia.org/wiki/Renault
http://en.wikipedia.org/wiki/Carlos_Ghosn
http://en.wikipedia.org/wiki/Renault_Samsung_Motors
http://en.wikipedia.org/wiki/Automobile_Dacia
http://en.wikipedia.org/wiki/AvtoVAZ
http://en.wikipedia.org/wiki/Renault-Nissan_Alliance
http://en.wikipedia.org/wiki/Nissan
http://boyracer.blogspot.com/2012/04/legends-of-wheels-part-isergio.html
Here is part II of 'Legends of Wheels' series based on another legendary icon in the automobile industry - Carlos Ghosn also known as Keiratsu killer, Samurai, Le cost killer, Mr. Fixit, Gaijin Hero and Seven Eleven. Fluent in French, Arabic, English and Portuguese -- and recently Japanese -- Ghosn is the quintessential international businessman. He is not only CEO and president of Nissan and Renault and AvtoVAZ, he is also on the board of Alcoa, Sony and IBM.
Born to French family living in Brazil, Carlos Ghosn is Director and CEO of Renault S.A., Nissan Motors and the Renault-Nissan Alliance. Ghosn began his career in the automobile field by working with Michelin for 18 years which is the largest tyre maker in the world. Ghosn was allocated the South American operations which were unprofitable and was supposed to report directly to Francois Michelin. Ghosn formed cross-functional management teams to determine best practices among the French, Brazilian and other nationalities working in the South American division.The experience in multicultural Brazil formed the basis of his cross-cultural management style and emphasis on diversity as a core business asset. The division returned to profitability in two years.
Renault
Renault was losing a billion francs a month and reported a deficit of 12.5 billion in 1984. The government intervened and Georges Besse was installed as chairman; he set about cutting costs dramatically, selling off many of Renault's non-core assets, withdrawing almost entirely from motorsports, and laying off many employees. This succeeded in halving the deficit by 1986, but he was murdered in 1986. He was replaced by Raymond Lévy, who continued along the same lines as Besse, slimming down the company considerably with the result that by the end of 1987 the company was more or less financially stable.
It was eventually decided that the company's state-owned status was detrimental to its growth, and Renault was privatized in 1996 and Carlos Ghosn was brought in. He soon cuased an uproar by shuttering a Renault plant in Belgium and wringing out billions in costs by leaning on suppliers and in-house units alike.
This new freedom allowed the company to venture once again into Eastern Europe and South America, including a new factory in Brazil and upgrades for the infrastructure in Argentina and Turkey. Renault also owns Dacia Motors with 99.43% owned by Renault, AvtoVaz owned 25% by Renault with plans to increase the stake to 50% and Samsung motors with a 80.1% stake.
When Renault CEO Louis Schweitzer ponied up $5 billion to buy effective control of Nissan that year, there was skepticism to say the least. Industry wags such as Robert Lutz, currently vice-chairman of General Motors Corp., publicly stated that Renault might as well have dumped the billions in the Pacific ocean. Into the breach came Carlos Ghosn, a savage cost-cutter and first-class intellect. But even he gave this salvage job only a 50-50 chance before leaving for Japan.
Renault Nissan Alliance
Renault-Nissan Alliance is a strategic partnership between Paris-based Renault and Yokohama, Japan-based Nissan, which together sell more than one in 10 cars worldwide. The companies, which have been strategic partners since 1999, have nearly 350,000 employees and control six major brands: Renault, Nissan, Infiniti, Renault Samsung Motors, Dacia and Lada. They sold about 8 million cars in nearly 200 countries in 2011, behind General Motors and Volkswagen for total volume. The strategic partnership between Renault and Nissan is not a merger or an acquisition.
The two companies are joined together through a cross-shareholding agreement. The structure was unique in the auto industry during the 1990s consolidation trend and later served as a model for General Motors and PSA Peugeot Citroën, PSA Peugeot Citroën and Mitsubishi, and Volkswagen and Suzuk, though the later combination failed. The Alliance itself has broadened its scope substantially, forming additional partnerships with automakers including Germany's Daimler, China's Dongfeng Motor, and Russia's AvtoVAZ.
Renault currently has a 44.3 percent stake in Nissan, and Nissan holds a 15 percent stake in Renault. Ghosn has compared the Renault-Nissan partnership to a marriage: "A couple does not assume a converged, single identity when they get married. Instead, they retain their own individuality and join to build a life together, united by shared interests and goals, each bringing something different to the union. The goal of the Alliance is to increase economies of scale for both Renault and Nissan without forcing one company's identity to be consumed by the other's. The Alliance achieves scale and speeds time to market by jointly developing engines, batteries and other key components. For instance, Renault builds nearly all of the diesel engines in Nissan cars sold in Europe. Nissan’s market share increases in Europe have been a result of badging various Renault van models such as the Renault Kangoo/Nissan Kubistar, Renault Master/Nissan Interstar, Renault Trafic/Nissan Primastar.
The Alliance also oversees purchasing for both companies, ensuring larger volume and thus better pricing with suppliers. The Alliance reported more than €1.5 billion in synergies in 2010. At the time it was created, Renault bought 36.8 percent of Nissan's outstanding stock, and Nissan vowed to buy into Renault when it was financially able. In 2001, after the company's turnaround from near-bankruptcy, Nissan bought a 15 percent stake in Renault, which in turn increased its stake in Nissan to 44.4 percent. The alliance has invested heavily in developing car markets such as India, Russia, Brazil and China.
In September 2009, Avtovaz announced plans to cut 27,600 jobs, more than a quarter of its workforce, after having been rescued from bankruptcy by a 20bn-rouble bailout from then Prime Minister Vladimir Putin during spring that year. with the Russian market having bounced back, there is a renewed willingness to invest. The Renault Nissan Alliance pumped money in the company for a 25% share.
A new production line was inaugurated last week in the Togliatti plant, backed by a 400m-euro ($525m; £330m) investment, and plans are in place to produce not only Ladas here, but Renault and Nissan models too. Lada and its Japanese and French alliance partners currently command a 33% market share in Russia. One major hurdle remains, however, namely Mr Ghosn's ambition to take a majority stake in Avtovaz. Deliveries by the two car companies and their Russian Partner AvtoVaz rose to 8.03 million vehicles in 2011, up from 7.28 million in 2010.
Reviving Nissan Motors
Nissan is one of the major car makers from Japan. Nissan became the second largest car manufacturer in 2011, surpassing Honda with Toyota still very much the dominant first. Along with its normal range of models, Nissan also produces a range of luxury models branded as Infiniti.
In 1999, with Nissan facing severe financial difficulties, Nissan entered an alliance with Renault S.A. of France. Renault purchased a 36.8 percent stake in Nissan. While maintaining his roles at Renault, Ghosn joined Nissan as its chief operating officer in June 1999, became its president in June 2000 and chief executive officer in June 2001. Under CEO Ghosn's "Nissan Revival Plan", the company has rebounded in what many leading economists consider to be one of the most spectacular corporate turnarounds in history, catapulting Nissan to record profits and a dramatic revitalization of both its Nissan and Infiniti model line-ups.
He took plenty of flak after slashing more than 20,000 jobs and closing assembly plants. When he joined the company, Nissan had debt of $20 billion and only three of its 48 models were generating a profit -- and reversing the company's sinking fortunes was considered "mission impossible.". Ghosn promised to resign if the company did not reach profitability by the end of the year, and claimed that Nissan would have no net debt by 2005. Ghosn determined that he had to slash purchasing costs by 20%, reduce capacity by 30%, close five plants and displace 20,000 odd-workers through lay-offs and attrition. An American CEO could do much of that in months, not so in Japan. In the late 90's, its public viewed the sale of national champions to foreigners akin to treason. Nissan belonged to a massic keiretsu -- a web of business alliances -- in which stability trumped sound financial management. It had billions of yen tied up in cross-shareholdings with suppliers and keiretsu partners. He also auctioned off prized assets such as Nissan's aerospace unit.
His radical methods would make him a “target of public outrage,” according to the Wall Street Journal. However, in one year, Nissan's net profit climbed to $2.7 billion from a loss of $6.1 billion in the previous year. Twelve months into his three-year turnaround plan, Ghosn had Nissan back in the black, and within three years it was one of the industry's most profitable auto makers, with operating margins consistently above 9% -- more than twice the industry average. Nissan's operating profit (EBIT, or earnings before interest and taxes) margin increased from 1.38% in FY 2000 to 9.25% in FY 2006.
He ended Nissan's reliance on an interwoven web of parts suppliers with cross-holdings in Nissan—a Japanese operating model called "keiretsu." He changed the official company language from Japanese to English and included executives from Europe and North America in key global strategy sessions for the first time.
In May 2005, Ghosn was named president and chief executive officer of Renault. When he assumed the CEO roles at both Renault and Nissan, Ghosn became the world's first person to run two companies on the Fortune Global 500 simultaneously. Post tsunami in Japan Ghosn has remained committed to building at least 1 million of Nissan's cars and trucks in Japan annually. Ghosn's ambitious recovery timeline -- with complete rebuilding of all damaged plants, and full production expected to be restored by October 2011 -- has put Nissan ahead of competitors such as Toyota.
Ghosn wrote a best-selling business book called "Shift: Inside Nissan's Historic Revival." He was the subject of another business book called "Turnaround: How Carlos Ghosn Rescued Nissan" by David Magee. Ghosn has also been responsible for Nissan's revival of the GT-R Skyline brand name with the 2007 Nissan GT-R which has successfully beaten the best performance cars from other Japanese stables incluiding the Mitsubishi Lancer EVO X FQ-400 and Subaru Impreza WRX STI
Nissan Leaf
When Carlos Ghosn announced dedicating$5 billion to bring the Nissan Leaf (and numerous derivative electric cars based on the Leaf's architecture) to market—a gamble that prompted Business Week to ask whether he was "crazy." Not long ago, Nissan was being pilloried for a lineup with few hybrid options, as well as CEO Carlos Ghosn's stubborn insistence on investing in unproven all-electric technology. Among the skeptics: his own employees. The zero-emission Leaf, which Nissan began delivering in late 2010 in the United States and Japan, is the world's first mass-produced electric vehicle. As per Carlos Ghosn the first electric cars were awful. They were selling for $100,000. Then there is the Volt, which is $40,000. This is $25,000 [after government incentives].
http://en.wikipedia.org/wiki/Renault
http://en.wikipedia.org/wiki/Carlos_Ghosn
http://en.wikipedia.org/wiki/Renault_Samsung_Motors
http://en.wikipedia.org/wiki/Automobile_Dacia
http://en.wikipedia.org/wiki/AvtoVAZ
http://en.wikipedia.org/wiki/Renault-Nissan_Alliance
http://en.wikipedia.org/wiki/Nissan
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