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The Global Leadership of Carlos Ghosn at Nissan

“I did not try to learn too much about Japan before coming, because I didn’t want to have too
many preconceived ideas. I wanted to discover Japan by being in Japan with Japanese people.”1
“Well, I think I am a practical person. I know I may fail at any moment. In my opinion, it was
extremelyhelpful to be practical [at Nissan], not to be arrogant, and to realize that I could fail
at any moment.”
Carlos Ghosn, 2002

Nissan had been incurring losses for seven of the prior eight years when, in March 1999, Carlos Ghosn
(pronounced GOHN) took over as the first non-Japanese Chief Operating Officer of Nissan. Many
industry analysts anticipated a culture clash between theFrench leadership style and his new Japanese
employees. For these analysts, the decision to bring Ghosn in came at the worst possible time because
the financial situation at Nissan had become critical. The continuing losses were resulting in debts
(approximately $22 billion) that were shaking the confidence of suppliers and financiers alike. Furthermore, the Nissan brand was weakening in theminds of consumers due to a product portfolio that consisted of models far older than competitors. In fact, only four of the company’s 43 models turned a profit. With little liquid capital available for new product development, there was no indication that Nissan would see increases in either margin or volume of sales to overcome the losses. The next leader of Nissan was either going to turn Nissanaround within two to three years, or the company faced the prospect of going out of business. Realizing the immediacy of the task at hand, Ghosn boldly pledged to step down if Nissan did not show a profit by March 2001, just two years after he assumed duties. But it only took eighteen months (October 2000) for him to shock critics and supporters alike when Nissan began to operate profitably underhis leadership.

Background of Carlos Ghosn
Born in Brazil in 1954 to French and Brazilian parents, both of Lebanese heritage, Carlos Ghosn received his university education in Paris. Following graduation at age 24, Ghosn joined the French firm, Compagnie Générale des Etablissements Michelin. After a few years of rapid advancement to become COO of Michelin’s Brazilian subsidiary, he learned tomanage large operations under adverse conditions such as the runaway inflation rates in Brazil at that time. Similarly, as the head of Michelin North America, Ghosn faced the pressures of a recession while putting together a merger with Uniroyal Goodrich. Despite his successes in his 18 years with Michelin, Ghosn realized that he would never be promoted to company president because Michelin was afamily-run company. Therefore, in 1996 he decided to resign and join Renault S.A., accepting a position as the Executive Vice President of Advanced Research & Development, Manufacturing, and Purchasing. Ghosn led the turnaround initiative at Renault in the aftermath of its failed merger with Volvo. Because he was so focused on increasing margins by improving cost efficiencies, he earned thenickname “Le Cost-Killer” among Renault ‘s top brass and middle management personnel. Three years later, when Renault formed a strategic alliance with Nissan, Ghosn was asked to take over the role of Nissan COO in order to turn the company around in a hurry, just as he had done earlier in his career with Michelin South America. For Ghosn this would be the fourth continent he would work on, whichcombined with the five languages he spoke, illustrates his capacity for global leadership.

Background of Nissan
In 1933, a company called Jidosha-Seizo Kabushiki-Kaisha (which means “Automobile Manufacturing Co., Ltd.” in English) was established in Japan. It became especially successful in North America with a lineup of smaller gasoline efficient cars and small pickup trucks as well as a sports...
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