For sixteen years Carlos Ghosn was Nissan’s CEO, bringing the company back from the brink of bankruptcy with his brand of extreme budget-slashing. Today, Ghosn announced that he will resign his post effective April 1.
Ghosn joined Nissan in 1999, after the Renault-Nissan Alliance was formed to save Nissan from its cash-hemorrhaging ways. Lebanese by ethnicity, raised in Brazil, and a French citizen, Ghosn rose through the ranks of Michelin and Renault, eventually becoming the first non-Japanese Nissan CEO in 2001.
Hero or Villain?
Despite its financial troubles Nissan, one Japan’s largest companies and most famous brands, occupied a special place of pride among its citizenry. Some industry watchers heralded Ghosn as a savior for rescuing Nissan from itself, while others watched in shock as “Le Cost Killer,” as he was nicknamed, wiped out decades, if not centuries, of Japanese business practices.
Before Ghosn, lifetime employment was a guarantee at large companies like Nissan or Toyota. Companies also nurtured a massive network of suppliers, many of which were redundant, mom-and-pop shops making the same part.
To the Western observer, it may seem ridiculous to make a couple hundred widgets at a time via an expansive network of family owned shops, instead of simply sourcing a few hundred thousand from one big supplier. There’s a very important reason for this, though: In Japan, companies are expected to be, above all, good citizens, a provider of jobs, training, and societal structure, bolstering the economy and keeping crime and destitution off the streets. When a part became obsolete, the company would often retrain these family-owned businesses or give them another contract.
Nissan had over 3,000 suppliers when Ghosn became CEO, and his first order of business was to slash, consolidate and squeeze them relentlessly to bring down costs. This was unthinkable to most Japanese at the time, and jolted the culture. Much ink was spilled analyzing what Nissan’s moves meant for Japan’s future.
Still, Ghosn’s moves likely gave Nissan continued existence, and by 2000 Nissan went from $6.5 billion in the red to $2.7 billion in profits. Perhaps the company did need Ghosn’s shakeup to survive. Or maybe they would have clawed their way back to profitability another way. Unless someone invents a machine to travel to alternate dimensions, we’ll never know.
However, despite all the aged gearheads rocking vintage Skylines and Fairladys at vintage car shows in Japan, the general sentiment among enthusiasts there was summed up thusly by our friend Katsuyuki Maehara, owner of several award-winning classic cars: “It’s a French company with a Japanese name.”
The Enthusiast’s Lament
We were told by a Nissan employee once that the Zama warehouse was kept on the down low for almost a decade because they were afraid Ghosn would sell everything off to save some yen. In 2012, Ghosn visited it for what appears to be the first time.
For the enthusiast, much was lost under Ghosn’s term. The Skyline GT-R, Z, Silvia, and many others were killed off. Some came back, but gone are the days when Nissan would at least attempt to inject some spirit into every model in the lineup. But hey, we got the Murano CrossCabriolet thanks to Ghosn’s wife, who demanded the model’s production. If we only could’ve put a bug in her ear about the IDx.
Today, Nissan’s lineup consists largely of shared platforms, engines, and the dreaded continuously variable transmissions. While it’s true the company is seeing an unprecedented near-10 percent US market share and record profits, one can’t help but cry for the part of Nissan’s soul that was lost in the process.
Mention to any Japanese engineer, product planner or accountant working at Nissan about the Safari Rally Bluebird, the Hakosuka GT-R at Fuji Speedway, or the Super Silhouette Turbo Corps and they’ll understand. We’ve never met Ghosn, but we’d bet he never knew of them before he took the job. Even if he did see Nissan as something more than a fleet of container ships unloading hordes of econoboxes across the world, he has certainly run it as if that’s exactly what he believed.
Ghosn will retain a chairman position at Nissan, but the CEO position and day-to-day management of the empire will be taken over by Hiroto Saikawa, a life-long Nissan employee who joined right out of university in 1977.
Saikawa is said to be just as zealous a cost-cutter as Ghosn, an aggressive and results-oriented leader. He helped Ghosn take apart the network of suppliers and is described as someone who isn’t afraid to make tough decisions for the sake of improving efficiency. “There is no difference between what I think and what he thinks,” Ghosn said of Saikawa last October. This doesn’t appear to bode well for enthusiasts, but there’s one glimmer of hope: if Saikawa graduated in 1977, he remembers the Hakosuka.
So why the move now? “You don’t make this kind of changes at a moment of crisis,” Ghosn told Bloomberg. “You make the changes at a moment when the company is doing well, when the company is healthy, when the company is not facing a big crisis, which is the case today.”
For his part, though, Ghosn will still retain his positions as both chairman and CEO of Renault and the Renault-Nissan Alliance as well as their newly acquired company as of four months ago. It’s pretty hard to be in charge of three global automakers at once, so we understand why Ghosn has chosen to hand over the reins. Now, to save Mitsubishi.