Posted on Tue, Feb. 01, 2005


Nissan chief keeps ties to S.C.
Ghosn gives lectures Monday in Columbia, recalls lessons learned while in Greenville

Business Editor

International automotive executive Carlos Ghosn says he put lessons learned while running Michelin North America in Greenville to good use when he was called on to rescue failing Japanese automaker Nissan.

“When I tell you I put my education and experience to work at Nissan, it is no understatement,” said Nissan’s chief executive officer. Those same lessons and others learned at Nissan will follow him when he takes on the added responsibility of French automaker Renault this spring.

Ghosn was in Columbia on Monday as part of the Wachovia Bank Executive Lecture Series. In the morning, he spoke to students at the Moore School of Business at USC, and during a luncheon, he addressed about 200 of South Carolina’s most powerful and influential business leaders and politicians.

It might have been one of the few times in the state when such a large group of state business and political leaders met with a major industrialist and no major announcement was made.

Seated with Ghosn at the Columbia Metropolitan Convention Center were former U.S. Sen. Fritz Hollings, Gov. Mark Sanford, former Gov. and U.S. Secretary of Education Dick Riley and USC president Andrew Sorensen.

At the next table were former Gov. Jim Hodges, Mayor Bob Coble, USC vice president for research Harris Pastides, and former secretaries of commerce Charlie Way and Bob Royall, who is U.S. ambassador to Tanzania. Also present was a large contingent of top Wachovia executives.

As a native of Brazil and educated in France, Ghosn said it was in Greenville he learned about the U.S. market, competition, the mingling of cultures and the restructuring of large corporations.

All of that came into play, he said, when he moved from Michelin to Renault and three years later joined Nissan.

Ghosn is credited with leading turnarounds at both automakers.

Ghosn said that when he arrived, Nissan “was in such a state of deterioration that the solutions to its problems — if any — were going to have to be found on the inside.”

He put together a team of employees and took three months crafting the Nissan Revival Plan, a three-year plan focused on three key commitments:

• Return to profitability in fiscal 2000

• Reach, at a minimum, an operating margin higher than 4.5 percent

• Cut automotive debt in half by fiscal 2002.

When he began at Nissan in 1999, the company had $20 billion in debt. That debt was eliminated by the end of 2002. Operating profit margin has gone from 1.4 percent to 10.1 percent. Market capitalization has gone from $9 billion to $15 billion.

But the progress did not come without cost. Five factories were closed and 21,000 jobs (mostly in Japan) were eliminated.

“The good news is that Nissan has established credibility again,” Ghosn said. “Today, we have a presence in all of the world’s major markets.”

He now prepares to take some of those lessons back to Renault when he takes over the helm of that company, while maintaining his position at Nissan.

Renault owns a controlling 44 percent share of Nissan, and Nissan owns 15 percent of Renault. Renault’s shareholders are expected to vote in April to name Ghosn chief executive.

It will be the first time in the auto industry that a single executive heads two companies.

Much has been made of Ghosn’s role at Nissan. Turning some of his attention to Renault will be good for Nissan, he said.

“There is a perception in the market that the revival of Nissan is due to Carlos Ghosn and the day that Carlos Ghosn is not here we are going to see the performance weakening,” he said.

But Nissan is not just Carlos Ghosn, he said. “Today, Nissan is mature and ready to prove that even though the CEO will be dividing himself between Nissan and Renault, the company is going to continue to perform at a very high level.”

Ghosn has been away from Renault for six years. He said he would have to take time to assess Renault’s strengths and opportunities before setting a course. “I will have to spend some time to reconnect with the company.”

But he noted that Renault is having a good year and that this will be the first time he is taking a job where it is not a turnaround situation.

Ghosn’s own background has made him uniquely suited to take on dealing with the cross-cultural dimensions of the two companies.

He was born in Brazil to Lebanese immigrants. As a child, he moved to Lebanon and then to France, where he was educated. He speaks five languages

But Ghosn has deep connections to South Carolina. Three of his four children were born here.

He also still owns a house in the Upstate. Sanford joked Ghosn still pays real estate taxes in Greenville because his wife insisted they keep their house when they left to join Renault.

Ghosn has spoken at USC on a couple of occasions, and the school has some ties to Nissan through the International Masters in Business Administration program.

IMBA students have done internships at Nissan over the years, said Rob Rolfe, the program’s executive director. And the Moore School of Business has an executive education program with Nissan.

The school sends faculty to work with some of the Nissan offices in Tokyo. “As part of that, we actually have two full-time employees of Nissan in Tokyo taking the first year of the IMBA program in Columbia,” Rolfe said.





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