Mr. Renault-Nissan is upbeat

Setback with GM alliance doesn't faze brilliant turnaround specialist

October 06, 2006|By Detroit Free Press

DETROIT -- In Paris last week, Carlos Ghosn looked like a man realizing his legacy might be defined by a deal that never happened.

Despite Ghosn's unquestioned brilliance and personal charm, the auto industry's irresistible force seemed to be spinning its wheels against an immovable object: General Motors Corp.'s conviction that the alliance Ghosn proposed wouldn't do it much good.

Ghosn, whose melding of Renault SA and Nissan Motor Co. Ltd. into a global power made him a pop-culture icon in France, Japan and his native Brazil, was uncharacteristically defensive in Paris. He insisted that the negotiations with GM weren't his idea, but that, as Renault-Nissan chief executive, he was duty bound to investigate anything that could be good for the companies and their shareholders.

"If I got to pick the moment" to begin negotiations, Ghosn said after a late dinner a block off the Champs Elysees, "I would not have picked the first half of 2006. This is not my best time."

The negotiations concerning a possible alliance of Renault and Nissan with GM fell through Tuesday, when GM's management recommended shelving the talks, and its board accepted the recommendation.

Ghosn has other problems as well. Although the companies he runs are more profitable than GM, Renault is midway through a void in its cycle of introducing new models. Nissan is just coming out of a similar dead spot. The month-to-month sales figures are not good at the moment, prompting criticism that clearly irritates Ghosn, who insists he built the alliance to succeed in the long run.

"You read some articles today, and you say, `Oh my God, is it possible they are talking about Nissan?' " Ghosn asked testily. "You read articles and you think Nissan is a completely collapsed company like GM, Ford or Chrysler."

Ghosn is the champion of the win-win alliance among automakers, but the deal he offered wasn't sweet enough to win GM, and a similar proposal probably won't gain him a partnership with Ford Motor Co., said James N. Hall, vice president for industry analysis at consultant AutoPacific Inc.

"He wanted a purchasing deal," in which the companies pooled their shopping lists to save money through bulk buying, Hall said. "He's going to have to give more than that to get a deal with Ford."

Ghosn has been under pressure in France, where many observers believed he should focus on making Renault stronger, not scouring the globe for the next mega deal.

Ghosn does believe Renault-Nissan needs help to compete with Toyota, but the criticism hits him where he lives, not just where he works.

Ghosn sees the Renault-Nissan alliance as a model for how the world should operate in the 21st century.

Born in Brazil to Lebanese parents and educated at the most elite school in France, Ghosn is immensely proud of his multicultural heritage.

"Brazil is a melting pot," he said. "You learn very early to respect diverse identities."

The ideal of people from different cultures and companies teaming up so that everybody profits is not just a business model, it's at the core of Ghosn's personal philosophy.

"Everybody" in the world "is seeking globalization, and at the same time, everybody wants to preserve their identity," he said, describing the GM alliance as "one possible answer to these contradictions, which is at the heart of the 21st century."

But that, apparently, was not the answer GM was seeking.

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