• Sedat Onat

Carlos Ghosn, The Man of Plans & Goals

Updated: Aug 10


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Nissan in Crisis

Nissan, searching for methods to get rid of the financial crisis it went through in 1990s, also known as lost decade, upon Daimler&Chrysler’s renouncing the partnership (Ghosn, Shift, 2003, p. 125) because of the rejection of its demand to buy more than 50% of the shares, signed a cooperation agreement (made an Alliance) with Renault in March 1999 and sold the controlling stake to Renault.


Nissan’s objective in this alliance can be summarized as having a say in Europe, as for Renault’s goal, it was gaining a more efficient technology. The main approach was, by creating a synergy, removing each other’s deficiencies with the logic of “two companies and two brands” rather than “one company two brands”. According to Carlos Ghosn’s statement; both brands were almost in a perfect accord with each other. (Ghosn, Shift, 2003, p. 108).


The signed agreement was not a merger but an alliance. The difference was the existence of not one but two self-governing companies. In this case, both companies contributed by complementing each other. Nissan’s high production quality, engineering, reliability; merged with Renault’s innovative designs, superior market power and successful cost management. At the same time, Nissan was dominant in Far East market and Renault was dominant in European market.


Nissan’s profit margin has been very low since it was clutching at the market in the last 8 years, which it was in crisis. For example it was estimated that the company was making a 1000-USD concession for each vehicle it sold in American market. However, its purchase cost was 15-25 % higher compared to Renault’s. Because of financial difficulty the launch new models was delayed and outdated vehicles, compared to market, was being sold. The company had 1 million surplus a year in production capacity. As a result all of these Nissan was constantly losing in its operations, facing an increasing investment crisis and experiencing an almost chronic financial bottleneck. (Kılınç).


It was decided that both companies would join their forces by keeping to be independent and local;

  • One platform and technology but two different designs (250 million USD saving for each platform)

  • One engine design (100 million USD saving for each engine)

  • One factory investment (500 million USD saving for each factory)


Renault appointed COO Carlos Ghosn, an engineer of Lebanese origin, as the chairman of Nissan. Carlos Ghosn was the fourth non-Japanese executive appointed to a Japanese car maker.


Carlos Ghosn was transferred to Renault as vice-president in 1996 having been the CEO of Michelin in North America at the end of 18 years. After his success in Renault, Carlos Ghosn first became Nissan’s chief operating officer (COO) and then a year later became the company’s chief executive officer. Nissan also supported this appointment decision of Renault because of Carlos Ghosn’s success in 20 Billion Plan.


According to the Agreement;

  • Renault would buy 36,8 % of Nissan’s shares for 5 billion USD. (Ghosn, Shift, 2003, p. 1305).

- GM Vice-president Bob Lutz defined this as “Leaving a container including 5 billion USD into the middle of the ocean to sink” (Ghosn, Shift, 2003, p. 1361).

- Ford’s CEO Jack Nasser said that “We don’t want to waste our hard-earned money paying off careless depts.” (Ghosn, Shift, 2003, p. 2058).

  • Both companies would keep their own names and identities.


1999 – Nissan Revival Plan (NRP) (3-year revival plan)

Carlos Ghosn immediately started to work without wasting time and negotiates as many people as possible from the lowest rank to the highest and takes into consideration their ideas and determined the situation and solutions. In this process almost 2000 ideas were taken into consideration. (Ghosn, Nissan Revival Plan, 1999, p. 15).


The most interesting of all, when asked why did the company fall into this situation, nobody, including the ones who had been in management, could give a clear answer to that question.


The reasons determined by Ghosn (Ghosn, Shift, 2003, p. 1628)

  • The company is not profit-oriented, in fact profit must be in the center of the goals.

  • Managers are not sure of the results of their decisions. (It is not certain or clear that whether the company makes profit after the sale of the cars)

  • According to the result of the cost analysis, which are done later, only 4 of the 43 models make profit. (Ghosn, Shift, 2003, p. 1637)

  • Toyota’s successful strategy is patterned after (copied exactly as it is applied in Toyota). However, instead of copying a prescription, it is necessary to find out solutions peculiar to the company.

  • The period of goals is too long because urgency is not perceived. (For example, Although a time limit determined by Ghosn is only 1 week, the management sometimes set it as 1 year.)

  • The quantity and priority of goals are not clear.

  • Being used to problems

  • Not sharing knowledge and not feeling responsible as a result of departmentalization.

  • The voice of those who have innovative ideas is not heard.


Nissan under the management of Carlos Ghosn, prepared a short term recovery plan, Nissan Revival Plan covering the period between 1999 and 2002 and presented the plan to the media on the 18th of October 1999.


In order not to cause any rumor before the briefing, the explanation was made to the 148.000 employees at the same time with the media briefing. (Ghosn, Shift, 2003, p. 2018).


The Goals of the Plan (Ghosn, Shift, 2003, p. 201)

  1. Returning to profitability for the fiscal year of 2000

  2. Reaching to 4,5% profit growth at the end of the fiscal year of 2002

  3. 50 % decrease in loan (borrowing) until the end of the fiscal year of 2002


Carlos Ghosn and other members of board of directors declared that they would resign if they didn’t reach the goals above. (Ghosn, Shift, 2003, p. 201).


Assuming the plan is successfully realized, the company’s projection for 2 years and 5 years later is shown as well. (Ghosn, Shift, 2003, p. 2159).


The goals at first causes surprise among the employees. Some managers who are not in the board of directors reacted to those goals. But nobody could say “I don’t agree with these goals, I object to them” about the goals which were considered to be the only way to recover the company from downfall. If they said “no” it meant they had to go.


This Revival Plan required some actions;

1- Closing down 5 factories in Japan and as a result of this laying off 21.000 Nissan employees, most of whom work in Japan. (This number equals 14 % of the workforce) (Ghosn, Nissan Revival Plan, 1999, p. 42)

1.1- The production in Japan was operating with 53 % capacity. It was aimed to reach 80 % capacity use after factory close-down.

1.2- Thanks to his strike experience in Michelin, Carlos Ghosn knew how to approach to the syndicates and dealt with them quite openly. He told them that if any action was not taken it was obvious that the company would go bankrupt within 5-6 months. He explained the current situation using data. He got the support of workers’ representatives provided that he takes their observations into consideration.


2- In 1999 the number of platforms/models were decreased from 7 plants and 24 platforms to 4 plants and 15 platforms as a result of this change productivity was increased. (Ghosn, Nissan Revival Plan, 1999, p. 31)

3- Nissan’s share (some of which didn’t belong to Nissan) in Japan’s distributorship system was decreased by 10 % considering the coverage zones.


4- Unproductive and redundant fixed assets were sold off. (Ghosn, Nissan Revival Plan, 1999, p. 37)


5- The Keiretsu system which means working with a chain of finance, material/service suppliers, was left gradually and the number of suppliers and partners was decreased.

5.1- The Keiretsu system is widely used in the Japanese automobile industry. According to this system, the companies within the system have to prioritize the companies in the chain when supplying goods. And this rule makes it unnecessary to behave competitively for the suppliers. Carlos Ghosn’s goal was leaving the system gradually. He was planning to provide the company’s supply in better conditions by collaborating with Renault and using scale of economy. As there weren’t anybody else who left this system before, Carlos Ghosn started to be known as “Killer of Keiretsu” in the automotive sector after this decision.

5.2- Within this framework, Nissan’s shares in many supplier companies, which Nissan was cooperating and no longer wanted to work with, were sold.

5.3- The number of suppliers was decreased from 8.145 to under 4.000.


6- Supplier Management (Nissan 3-3-3 Program) (Ghosn, Nissan unveils Revival Plan, 1999)

6.1- Nissan 3-3-3 Program was prepared

6.1.1- 3 Partners “Supplier & Purchasing & Engineering”

6.1.2- 3 Years

6.1.3- 3 Regions “Asia & America & EMEA”

6.2- Carlos Ghosn talked to all the suppliers as he did in Renault explained the details of the plan. He demonstrated the suppliers that Nissan would make a lot of sacrifices and this attitude inspires the suppliers’ confidence and as a result they agreed to make considerable amount of discount in their prices.

6.3- He expressed that they would understand those who didn’t think of standing by Nissan and also added that they wouldn’t forget those who would be standing by Nissan due to their stance at that difficult time of the company.


7- Bringing the car parts in compliance with market standards

7.1- New designs were made to use parts in market standards, to share parts within Nissan models and between Nissan and Renault models.

7.2- For example, even producing a Nissan size tire requires 20-25% extra cost.


8- The sale of aviation unit


9- Changing the official language of the company from Japanese into English

9.1- Most of the members of the company including board of management either didn’t know English at all or knew very little. This caused an important communication barrier. (Ghosn, Shift, 2003, p. 1610)


10- Adapted meritocracy and appointed managers from Europe and North America to the crucial positions.

10.1- Most of the members of top management were composed of a homogeneous group of people who graduated from some specific schools and were coming from the same city. This homogeneous structure enabled an easy management but at the same time curtailed an open-minded and objective management.

10.2- The main criterion in the current promotion and wage system was the period of time rather that performance.

10.3- With some new changes, the company discharged the redundant and low performing staff.

10.4- The staff who had been working for the company for a long time were put into an advisor status.

10.5- People who from Europe and North America, at the same time having a different perspective, were appointed to crucial positions. (Priority was given to Renault staff because they already knew Renault working system.)

10.6- The number of board of management, which was not able to meet very often due to a crowded number, was decreased from 37 to 10 people, including only the leaders of units and top managers. (Ghosn, Shift, 2003, p. 1610)


11- Setting up Cross Functional Teams (CFT = Cross Functional Team) (Ghosn, Shift, 2003, p. 1690)

11.1- The company adopts a cross functional team approach instead of a centralized bulky structure. With this new structure, specialists coming from different departments take different approaches and find better solutions to the current problems, providing transparency and positive change in the company. (Kılınç).

11.2- The hierarchy of Cross Functional Teams: “Cross Functional Team Leader > Cross Functional Team Pilot > Sub-teams”

11.2.1- The number of leaders for each team was determined as 2 in order to exchange more ideas.

11.2.2- The number of CFT pilots was determined as 10 people.

11.2.3- Sub-teams were formed under each CFT pilot.

11.3- With the help of 9 Cross Functional Teams composed of approximately 500 people in total;

11.3.1- Costs were reduced by using good quality but cheap parts whose functions were almost the same.

11.3.2- More parts were shared among different models by changing design.

11.3.3- Thus, operating costs were reduced.


12- Updating the wage system

12.1- The wage system, which was based on outdated criteria such education, age, seniority, family responsibilities, was changed.

12.2- Those who come up with innovative ideas were rewarded with a premium as an incentive.

12.3- Top management was given shares of the company as an incentive.


13- Redefining the power and responsibilities

13.1- When problems occured, current general reaction was blaming other teams for the responsibility.

13.2- The responsibilities were redefined and the employees were encouraged to take initiative to use their power.


14- Providing Transparency (Kılınç)

14.1- Here transparency did not mean only being audited by independent auditing companies. At the same time, it meant that “there was no difference between what a company thinks, says and does.”

14.2- Corporate communication was given importance. Decisions made in the periodical meetings were shared with sub-staff.

14.3- All communication channels of the company were re-organized, as much information as possible shared on time.

14.4- The employees were coming from different parts of the country and they were in contact with millions of people. This meant that reputation of a transparent company would be better all around the country.


15- Works on brand image (Kılınç)

15.1- The new vision was Enriching people’s lives”

15.2- New mission was ” Nissan, with its merger with Renault, gives perfect measurable values and services and provides innovative automobile products to all of its partner interest groups.

15.3- New slogan was “Change your expectation”


16- Updating the design department

16.1- It was moved under the engineering department and linked to the board member who was repsonsible for Product Planning. Thus it became more independent. (Ghosn, Shift, 2003, p. 2189).

16.2- A Japanese manager, who was not negatively affected by Nissan’s last unproductive ten years, was appointed to the top of design group. (Ghosn, Shift, 2003, p. 2195).

16.3- The company started behave more bravely in terms of design. As a result of this, series such as Primera and FX reached successful sales charts.

16.4- The number of female staff in marketing and design was increased. More than half of the cars, which were sold around the world, were either bought by women or decided by women about which model to buy. As women played such an important role in the sales of the cars, it was thought that men’s marketing and designing the cars which were to be bought by women would be an imperfect approach. Special attention was paid to this issue.


When the plan is to be applied, the progress is transparently presented to all by giving a detailed explanation every 6 months. (Ghosn, Shift, 2003, p. 2097) At the same time, this is putting change into a perspective. (Ghosn, Shift, 2003, p. 2866)


When it is the end of March 2002 (8 months before planned), all these targets of Carlos Ghosn were fully achieved and Nissan became on of the firms with the highest profitability rate of the automotive market with 9% (Ghosn, Shift, 2003, p. 207).


According to what employees working in the company said, “Condition of Resignation” was one of the important factors motivating the employees.


Following this success, Renault increases its share at Nissan to 44,4 % (Ghosn, Shift, 2003, p. 219).


2002 – Nissan 180 (3-year growth plan)

In May 2002, Carlos Ghosn announces a new 3-year plan called “Nissan 180” (180 is formed of the numbers of the targets.) (Ghosn, Shift, 2003, p. 2785);


Targets of the plan (Ghosn, Shift, 2003, p. 207)

  1. From 2005 Spring and afterwards, the global sales will increase by 1 million items (Between 2004-09 and 2005-09, the sales have increased up to 1,2 million items).

  2. Profitability will be increased to 8% (it was reached to 11.1% at the end of 2003 financial year).

  3. With the Spring 2005, the market debts will be decreased to “0” (reached at the end of 2003 financial year).


2005 – Nissan Value-Up (Sustainable Performance)

After the success of previous recovery and growth plans, Carlos Ghosn starts working for a new plan.


Targets of the Plan (Ghosn, Shift, 2003, p. 2885);

  1. The annual global sales will be increased to 4,2 million items until the end of 2007 financial year.

  2. The profit margin levels at the peak of the market will be preserved.

  3. Return on investment will be at least 20%.


The main elements of the Plan

  • Higher profit.

  • Higher speed and quality.

  • More cooperation with Renault.


According to this plan (Ghosn, 106th Shareholder Meeting, 2005);

  • 28 new models to be produced for the market (18 models to be updated + 10 new models).

  • Infiniti brand will be turned into luxury global brand.

  • Light commercial vehicle market will be focused.

  • The profitability rate of 4% in the light commercial vehicle market will be increased to 8%.

  • Supply network will be strengthened.

  • Assets in China, Thailand, Arab Peninsula, Egypt, Russia and Western Europe will be strengthened.

  • 10 new security technologies will be developed (Ghosn, Nissan Value-Up, 2005, p. 56).


2008 – Nissan GT 2012 (Growth and Trust)

The next plan of Carlos Ghosn was “GT 2012” consisting of 2008-2012. He aims a long-term performance with the plan consisting of the first letters of Growth and Trust. (Ghosn, Nissan GT 2012, 2008) (Nissan, Nissan to Announce Mid-term Quality Improvement Program “Nissan GT 2012 – Quality Leadership”, 2008)


Targets of the plan (Nissan, Nissan to Announce Mid-term Quality Improvement Program “Nissan GT 2012 – Quality Leadership”, 2008)

  1. Warranty issues will be reduced by half.

  2. The rate of supplier damaged goods are to be reduced by half.

  3. Car breakdowns will be reduced by half.

  4. Spare parts supply time will be reduced by half.

  5. The zones with the highest customer satisfaction rate will be doubled.

  6. The number of high quality products will be doubled.


However, the plan was suspended in 2009 due to the financial crisis in 2008 and the related slowdown together with the currency fluctuations (Ghosn, Nissan GT 2012, 2008).


2009 – Nissan Recovery Plan

Due to the 2008 Economic Crisis, Ghosn had to suspend the “GT 2012” plan temporarily. And he prepares a new plan.


According to the plan (Ghosn, Nissan Recovery Plan, 2009)

  1. The number of workers will be decreased by 20%.

  2. Until the condition gets better, a wage deduction of 10% will be made from Board of Management members and of 5% will be made from Managers.

  3. The Bonus to be given to the Board of Management for the 2008 financial year will be canceled.

  4. Overtime work will be reduced by 75%.

  5. Production days will be reduced in February and March.

  6. There will be cuts in travel expenses by 75%.

  7. Recruitment from countries that require a high minimum wage will be kept at a minimum.

  8. Sponsorships will be reduced.

  9. Assets not related to the main business will be sold.

  10. Dividend payments will not be made.

  11. Revolving funds will be developed.


2011 – Nissan Power 88

The man of plans, Carlos Ghosn, announces his new 6-year plan between 2011-2016 called Power 88 in June 2011. (Nissan, “NISSAN POWER 88” MIDTERM BUSINESS PLAN ANNOUNCED, 2011)


Targets of the plan (Ghosn, Nissan Power 88, 2011)

  1. Power => Brand and sales force

  2. 8 =>8% market share

  3. 8 =>Sustainable profit rate of 8%


Things to do according to the plan (Ghosn, Nissan Power 88, 2011)

  • A new model to be produced every 6 weeks

  • The number of models will be 66 with the new models to be produced and therefore 92% of the market will be covered.

  • 90 New technologies to be developed.


Summary of Developments in Figures


Partnership with Dongfeng

An agreement is made with the Chinese Dongfeng company in 2002 (Ghosn, Shift, 2003, p. 3134).(2002)


According to this agreement;

  • Nissan will invest 1 Billion dollars in Dongfeng and will come a 50% partner of the newly opened Dongfeng Motor Company.

  • Dongfeng will produce the light commercial vehicles of Nissan under the name Dongfeng (Nissan Diesel brand will not be used) (Ghosn, Shift, 2003, p. 3214),

  • Dongfeng will continue to produce Nissan’s cars under the name Nissan.


Together with this agreement, both the production costs have been decreased and a stable place was obtained in the market by signing a contract with the greatest producer of the Chinese market.


Electric Vehicles (2007)

Carlos Ghosn tries to focus on this topic as he sees that the automotive market leads towards electric vehicles and he separates a budget of 4 billion EUR to the electric vehicle studies.


According to the plan, the model range of both firms will include “bottom up” electric vehicles. Within this plan, Nissan Leaf model is introduced to the market in 2010.


Carlos Ghosn who was exposed to great criticism due an enormous budget he kept, said “We will foresee the future, so we will prepare, if happens, we will be ready..”.


Partnership with Daimler (2010)

An agreement is signed in April 2010 with Daimler in order to show presence in the upper segment commercial vehicle sector.


According to this agreement*

  • Mercedes-based high-end cars will be produced for Renault and Infiniti.

  • There will be collaboration for the development of commercial vehicles.

  • In 2014, 4-cylinder gasoline motor vehicles will be started to be produced for Mercedes and a partnership will be started by opening a factory in Tenesse.

  • Diesel engines will be supplied to Mercedes.

  • Collaboration will be available in the processes of developing electric vehicles and petrol engines.

*Framework of agreement is continuously growing.


Tsunami Disaster (2011)

March 2011 brings a large Tsunami disaster together for Japan. This demonstrates how successful leader Ghosn was.


The Iwaki Motor Factory produces 60,000 motors annually at a place 42km far from Fukushima. And the factory is at a non-operating state after the disaster. The total cost of the disaster was $ 732,5 million for Nissan (Greimel, 2012).


One day after the disaster, he starts an evaluation of the situation with his team and determines what could be done;

  • He gives authority to the managers of the factory by removing the central authorization and allows them to make instant decision for themselves.

  • It switches from Pull Production system to Push Production system (Pull Production system, also known as Toyota Production System is left.).


Factory starts reworking in Mid-May with a capacity of 80%. It starts working fully with a complete capacity in September. Finally, he breaks a new record closing the production of 2011 with a 14,04% increase compared to the previous year.


Fruits of the success of Ghosn

Ghosn became the CEO of Renault & Nissan Alliance in 2005 due to his success (Ghosn, Shift, 2003, p. 3293). And therefore he becomes the first CEO managing two firms at the same time in the Fortune Global 500 list(The number of employees of Renault & Nissan Alliance was 300.000) (Ghosn, Shift, 2003, p. 3302).


GM

The billionaire businessman Kirk Kerkorian, affected by the success and perspective of Carlos Ghosn, buys 9,9% of the shares of General Motors and gets into the board of management. Then, GM management encourages to establish a partnership with Renault&Nissan Alliance under the management of Carlos Ghosn and to bring Ghosn to the head of this partnership. GM Management does not approach to this and Kirk sells his shares.


Ford

Ford company, in a very difficult position, brings an official proposal to Carlos Ghosn to be the head of management in 2006. However, Ghosn rejects the offer due to the rejection of Bill Ford Jr. to give the titles “CEO and Board of Directors” together.


Promotion at Renault & Nissan

Ghosn becomes both the CEO and the Board Chairman of Nissan and Renault in 2008.


Other information

  • In 1999, only 4 models out of 43 available models were profitable. In 2015, all 65 models were profitable.

  • The sales of 2,4 million in 1999 increased to 4,8 million in 2011. Targets were written until 2060.

  • In 2011, half of the Nissan executive management was from abroad of Japan.

  • There were firms that wanted to provide consultancy services but Carlos Ghosn rejects. This is because they come with ready prescriptions and they do not listen to the problems within the firm. And when actions take place, such firms do not feel a responsibility as much as Nissan managers do.

  • Nissan 350z is redesigned as a continuation of the old Datsun 240z as a symbol of rebirth (Ghosn, Shift, 2003, p. 213).

  • The production of a new platform with a market evaluation of 24 months is reduced to a record level of 12 months (Ghosn, Shift, 2003, p. 2943).

  • Instead of the general approach of the market, Hybrid (Internal combustion + electric) motor, only electric motor was insisted (Ghosn, Shift, 2003, p. 3006).

  • An agreement is signed with Toyota in 2006 yo produce components for electric vehicles (Ghosn, Shift, 2003, p. 3044).

  • Factories intended to be bought from the regions where models were sold in abundance and in this way the currency fluctuations left the least effect (Ghosn, Shift, 2003, p. 3098).

  • One of the greatest reasons why China could not buy the productions in Japan was that Japanese suppliers knew the firm well and they could reply to their demands very fast (Ghosn, Shift, 2003, p. 3125).


Carlos Ghosn

The first language that Carlos Ghosn, Lebanese origin, Brazilian-born, with Maronite faith, learnt was Portuguese. One day he becomes ill due to the unhealthy water given by his neighbour and he comes to Lebanon with his mother at the age of 6 to live in a cleaner environment. His father stays in Brazil to work (Ghosn, Shift, 2003, p. 307). He learns Arabic, French and English as well. He is a man who normally speaks in English but he can also express himself in French (Ghosn, Shift, 2003, p. 351).

Carlos Ghosn completes his primary education in Lebanon and goes to France for his university education in 1971 at the age of 17 (Ghosn, Shift, 2003, p. 319). Due to the Lebanon war in 1975, all his family needs to come to France (Ghosn, Shift, 2003, p. 439).


Michelin

As soon as he finishes university, he receives a job offer from Michelin as research expert but he rejects it by saying “I do not want to be a Tire Expert” and says he want to work at production. This is because that is the place where everything takes place. His offer was accepted and he starts working at production. Starting from the beginning makes him gain experiences (Ghosn, Shift, 2003, p. 550). He shortly climbs the career steps up (Ghosn, Shift, 2003, p. 569). When he left Michelin in 1996, he was the North America Factory Manager.


In 1981, when Michelin took Kleber, he was asked to prepare a report by the head management. And during this period, he realises that two firms complete each other. Kleber is good at the tires of agricultural vehicles and Michelin is good at the tires of light vehicles. Carlos Ghosn recommends the division of production of two firms and to depart from the scope of each other and nearly all of his recommendations are implemented (Ghosn, Shift, 2003, p. 629).


After the problems in production in Brazil in 1984, he was assigned to Brazil as a factory manager (Ghosn, Shift, 2003, p. 647). Michelin company produces rubber from natural rubber fields in Brazil. The production of both rubber and tire is performed by the same management. Although being proactive in this region where the inflation and currencies are quite fluctuating is very important, many mistakes are made due to the management style. He prepares a quick plan, he starts working to resolve this and a number of irregularities and structural problems like this and he succeeds in a short time.


During this period, Carlos Ghosn experiences a strike and overcomes this with success (Ghosn, Shift, 2003, p. 733).


His success brings him to the position as North America Factory Director (Ghosn, Shift, 2003, p. 780). During this period he sees that he cannot be number 1 with the warning from his wife because Michelin is a family business. He decides to quit at the top of his career and starts searching. This process brings him to Renault in September 1996 (Ghosn, Shift, 2003, p. 987).


Renault

He comes to Renault at a complex period. However, in his own words, “Joining a team during a problematic time provides you many opportunities”(Ghosn, Shift, 2003, p. 1066).


The greatest problem that Renault encounters is the high production costs. Carlos Ghosn takes this project and prepares the 20BillionPlan (frank). According to the plan, he changes the plan to decrease the cost by 3000 franks per vehicle within 3 years, which was the first target given to him, as 9-10.000 franks. The plan consists of decreasing the costs in all areas. The plan is explained in March, 1997 (Ghosn, Shift, 2003, p. 1139).


The plan consists of closing down a company in Belgium. He also meets the suppliers and provide them with details. During the years at Michelin, he gained a lot of experiences by sitting at the opposite side of the table for a long time. Under the plan, Renault provides confidence to the suppliers that it will make greate sacrifice and gets important discounts. This plan succeeds in 1999 (Ghosn, Shift, 2003, p. 1249) and he gains the nickname “Cost Killer” (Ghosn, Shift, 2003, p. 183).


His success in the 20 Billion Plan will be the main factor leading him to the head of Renault&Nissan Alliance.


Full of career achievements, Carlos Ghosn is a leader devoted to this sector who annually travels 150.000 miles between Tokyo-Paris, has a complete travel and visit plan for the next year, who continuously works from the early morning until the late night with a nickname “Seven-Eleven” and listens to the ideas of all groups including workers.


Staying away from the politics, the public is asked in a survey made in 2011 in Japan “Who would you like to govern Japan?” and Carlos Ghosn was the 7th, 12 times before the Japan Prime Minister. He also has his name in the Japanese menus as “Ghosn Bento”.


Main problems that Ghosn struggled

  • 1999 Nissan Financial Crisis

  • 2008 World-wide crisis and the recession afterwards

  • 2008 Yen crisis

  • 2011 Tsunami and Fukushima

  • October 2011 Thailand flood


Recommendations

  • Always evaluate the current situation objectively and quickly.

  • Set priorities, share them with everyone, give everyone a post-crisis vision. Render communication simple.

  • Authorize people.

  • Make a difference.

  • Empathize.

  • Listen to the ideas.

  • Managing is an art, not a science (Ghosn, Shift, 2003, p. 2821).

  • Strategy counts for 5% but fulfilment counts for 95%.

  • Be determined, discuss the way to target but stay on the target.

  • Name the targets.

  • Do not get used to the problem, feel uncomfortable.

  • Be transparent if you make any mistake, accept it, and try to find an effective solution without losing time.

  • Try to minimize the time between the moment when problems were created and the moment when they were solved.

  • Do not be afraid to criticize your productions (materials/services) because “You have to accept that you are ill to recover”.

  • Do not look at the figures, but the fact hidden behind.

  • If there is fire at a place, shout “Fire!” and do not keep silent.

  • Be disciplined;

You do a little with a low discipline,

You do a lot with a high disciple,

There is nothing you cannot do with a complete discipline.


Before concluding

Numbers are not always the accurate and sufficient demonstrations to show the success of a company. The most important is about how much the employees, customers, managers, public interest groups and the general public are proud of that company (Kılınç).


Therefore, in order to recover a company, it is necessary to focus on people first, motivate them towards targets, to be the source of hope for them and to create the feeling of possession (Kılınç).



References

  • -. (-, – -). Michelin leading the world’s tyre industry. Retrieved from Rezulteo Tyres: https://www.rezulteo-tyres.co.uk/michelin-tyres/car-tyre-brand

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April 15, 2016 - Istanbul

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