Frenchman helps Nissan to survive

By Kornelius Purba

TOKYO (JP): There is an old belief here that it is extremely difficult for a non-Japanese person to gain and maintain a decision-making position in a major Japanese company.

But French national Carlos Ghosn has proved, at least for the time being, that he can survive not only the suspicion and jealousy of the Japanese community, but he can lead the survival operation of giant automotive firm Nissan Motor Co.

Nissan Motor Co. president Ghosn is not the first foreigner to lead a big carmaker in Japan. Mark Fields from Ford Motors is the current president of Mazda Motor Corp., Japan's fifth largest automaker. In April 1996, Ford acquired a 33.4 percent stake in Mazda.

However, Japanese media described Fields' performance as much less convincing than Ghosn's, as the latter is facing more complex challenges due to the severe financial and sales problems faced by Nissan.

"I am already attached to Japan. I don't think you could do it if you didn't like the company or the country where you work. People around you have to feel what you do, mean what you say," Ghosn said in a packed media briefing on Friday night.

Ghosn said his position as an outsider in Japan's third largest automotive manufacturer had become one of the keys to his success in reviving the shrinking company after it suffered from a declining domestic trend over the last 26 years.

Speaking to the members of the Foreign Correspondent Club of Japan, Ghosn said the company gained a high increase from its operating and ordinary profits and a significant hike in its worldwide sales, because as an outsider he was much freer than Japanese Nissan executives were in carrying out the Nissan Revival Plan.

He said the company was able to make drastic reforms, including making a reduction in purchasing costs, a cut in sales expenses and administrative expenses and changing Nissan's accounts in line with internationally accepted accounting standards, because as a newcomer he did not have any previous burdens.

"To make radical changes in a company, it is very difficult to do it from the inside, because you have been with the company for years. They (the changes) have to come from the outsider who has some kind of credibility from the beginning. So people will listen to you.

"Japanese or non-Japanese, I think it is not a question of origin," said Ghosn.

French carmaker Renault SA sent Ghosn to lead the Nissan management in July last year after the two companies set up an alliance in March. Renault acquired a 36.8 percent stake in Nissan. Nissan invited Renault following its failure to stop the decline, which has been a setback in its world market in the last 10 years.

He said he could understand the pessimism and criticism of his new leadership from the Japanese side, including from blunt- speaking Toyota Motors chairman Hiroshi Okuda, adding that only evidence and concrete results could silence the critics.

"I take the skepticism as a fact," he said.

During the first half of this fiscal year, which starts in April in Japan, the company sold 9.2 million vehicles in the United States, or a 2.4 percent increase compared to last year's same period.

A drop of 4.1 percent in the U.S. market was previously forecasted for this year.

The United States remains the largest market for the manufacturer, where it has sold 30 percent of its products, followed by Japan at 22 percent, Europe at 22 percent and other markets by 23 percent.

Nissan also enjoyed a 2.2 percent growth in Europe. The weakening of the euro and the strengthening of the yen against the greenback, however, will pose a serious problem to the company, said Ghosn.

"The previous management is struggling with survival problems, and therefore it did not have enough time to think about long- term vision," Ghosn said about the acute problems faced by the Japanese management.

In its domestic market, however, the company suffered a 9.4 percent drop in sales to 335,000 vehicles. Ghosn acknowledged it was more difficult to lure back its consumers at home than in other countries.

On Oct. 30, Ghosn announced a 130 percent rise in group operating profits to 136 billion yen, which he described as the best in the last decade.

He said the company would be able to double its operating profit to 220 billion yen for the full year, and increase its net income by 400 percent to 250 billion yen, and hike its ordinary profit by 500 percent to 200 billion yen.

"This is only a step, but a very important step, because it will enable you to regain your confidence," said Ghosn, who is of Lebanese descent.

Mitsubishi Motors Corp., the country's fourth largest carmaker, will soon follow in Nissan's path, after German giant DaimlerChrysler took over a 34 percent stake in Mitsubishi earlier this year. With the stake, DaimlerChrysler has a veto right in board decisions.

The chief of the German firm, Juergen Schrempp, has clearly pointed out that he wants Rolf Eckrodt, who was just named chief operating officer of Mitsubishi, to take a lesson from Ghosn's experience in Japan.

It will not likely come without resistance. Mitsubishi's new boss Takashi Sonobe made it clear recently that Mitsubishi would not only copy the steps taken by Nissan. He vowed to maintain an independent management from DaimlerChrysler.

"This is something we have to do," Sonobe insisted in a media briefing.

Japan's largest automaker disclosed last month that the company would give equal opportunity to its worldwide employees, whereby every employee can grow and contribute regardless of differences in origin and gender.

However, at the same time, Akio Toyoda, the grandson of the Toyota founder, is tipped to regain the family's control over the automotive giant after it lost it in 1995 to Toyota's top professional Okuda.