CARLOS GHOSN

&
NISSAN SURVIVAL STORY
1
Nissan before Carlos Ghosn Joined
1.Net loss of 14 billion (1998)
2.Debt of US$ 17 billion (1999)
3.Hold only 19 % of J!n"s #$%et s&$e ('&ile in t&e 1974 it &eld 34%)
4.(n)ested US$ 4 billion in non*+to#oti)e b+sinesses
,.-#!loyees bon+s bsed on !$od+.tion le)els $t&e$ t&n .o#!ny"s !$ofit.
/.,000 +to!$ts s+!!lie$ 1 /00 .$ dele$
7.Nissn"s ..o+nts bein2 #intined by 200 bn%s .$oss t&e 'o$ld
8.Nissn is !$t of keiretsu system
2
Keiretsu
1.It had made Nissan over-invested in many non-core automotive business.
1998. Nissn 's &oldin2 n o'ne$s&i! st%e in 1394 diffe$ent .o#!nies in J!n
2.It had made Nissans supply cost were at the level that the company could no longer operate
profitability.
3ny senio$ #n2e$s of s+!!lie$ 'e$e fo$#e$ Nissn e#loyees
2.It had made Nissan had to go for a loan to stay survive.
De. 1998. Nissn 'ent fo$ lon of US$ 708 #illion f$o# J!n De)elo!#ent 4n%.
5 keiretsu is set of .o#!nies 'it& inte$lo.%in2 b+siness $eltions&i!s nd s&$e&oldin2s. (t is
ty!e of info$#l b+siness 2$o+!. 6&e %ei$ets+#intined do#inn.e o)e$ t&e J!nese e.ono#y fo$
t&e lst &lf of t&e 20t& .ent+$y (Wikipedia).
3
Why counldnt Nissan change before Ghosn arrived?
1.Conflict of Interest
The executives and managers were too concern about their
personal relationship with suppliers and dealers
2.Closed-Group anagement !ystem
Executives and managers were only concerned about their
respective department
4
Why counldnt Nissan change before Ghosn arrived?
4 bd bsi. ss+#!tion7
1.Okami-Ishiki
"elying too much on government or a higher-ran#ing priority $not company profit priority%
2.Shigarami
Concerning too much in self-reputation among other people&group
3.Oyata-Hi!mar"
Create the way of thin#ing 'too big to fail( and create the lac# of urgency
#.Oits"k$-Oik!s$
)sed when a company lags behind its competitors and tries to spur employees
5
Why counldnt Nissan change before Ghosn arrived?
86oo 4i2 to 9il: way of thin#ing
Employees had no SENSE o !"#EN$% so that they elt that a
company as big as Nissan would not and could not go bankrupt.
6
Who is Carlos Ghosn?
*orn in +orto ,elho- *ra.il- on arch /- 1/01 $from
2ebanese father and 3rench mother%
4ad his engineering degree from 5cole +olytechni6ue
)niversity- 3rench and had his master degree from
5cole 7es ines- 3rench.
!pent 18 years with ichelin in *ra.il and North
9merica
:oined "enault 1//; as 5,+ of 9dvanced "<7-
anufacturing and +urchasing. 5arned the nic#name
'2e Cost-=iller( $>he Cost =iller%.
:oined Nissan in 1///.
7
STR%NGTH
9bility to maintain relationship with people by
r$s&$'t
9bility to a(!&t and a(a&t the cultural practices
Good understanding of cross-cultural mi? in
organi.ation
9bility to spea# in many laguages. 3rench-
)%A*N%SS
4e is not a :apanese
4e spea#s non-:apanese 2anguage
Cultural barriers $mono-cultural%
9 gai&in in a society that suspects foreigners
O++ORTUNITY
Nissans position as an international company
Nissans employees
THR%AT
'eiretsu
+essimistic of Nissan 5mployees
8
Ghosns SWOT
What did Carlos Ghosn do?
Established NRP (Nissan Revival Plan)
as a Vission
&
Established C! (Cross"unctional !ea#s)
as a Mission
9
What did Carlos Ghosn do?
Defined Nissans t!en"ths & #ea$nesses
1%
STR%NGTH
!ignificant International presence and global reach.
9 world-leading manufacturing system.
9 leading edge in selective- crucial technological
fields.
>he alliance with "enault.
>alented and dedicated employees.
)%A*N%SS
4e is not a :apanese
4e spea#s non-:apanese 2anguage
Cultural barriers $mono-cultural%
9 gai&in in a society that suspects foreigners
N"+ was announced on
(ctober )*
th
+ ),,,
N"+ goal target
-..-
11
NRP consist of:
1. "educe operating costs by @1 trillion.
2. Cut number of parts and materials suppliers by half (cut the 'eiretsu)
A. "educe net debt from @1.1 trillion to less than @BCC billions by fiscal year of 2CC2 $more than
0CD reducement%.
1. Create new product investment and rollout.
0. 2ay-off 21CCC employees.
;. *oost-up by 20D of "<7 e?penditures
B. "educing vehicle assembly plants from seven to four.
8. "educing manufacturing platforms in :apan from 1 to 10.
/. !implified management structure.
1C. Introducing performance-based compensation and advancement programs for management.
12
CFT (Cross-Functional Teams)
1& 'onsist of abo(t 1% )e)be!s *o)in" f!o) )iddle )ana"e)ent+
,ith diffe!ent ba*$"!o(nds and ,ith a -!o.en t!a*$ !e*o!d and
/hosn as 'han"e -onso!
2& 0he )ain 1ob of the tea) is to *ont!ib(te to the !e"ene!ation of
the *o)-an2
3& 0he *on*e-t of '30 allo,ed a f!ee flo, of ideas and o(t of the bo4
thin$in"
4& 'a!los /hosn "a.e 9% da2s fo! '30 to "ene!ate ideas in the
-(!-ose of *o)-an2s !e.i.al&
13
Gh!s,s T!!-s t! R" C.T/
1. 9dapt to the culture. 8(f yo+ do not d!t; yo+ lose; if yo+$ identity is .o#!$o#ised; yo+ lose:
2. otivation to the empoyees. 8it 's t&e 2$etest tool t&t led to t&e Nissn t+$n$o+nd:
A. Communication. 6&is is <&osn"s #ost .$+.il 'e!on on &is lede$s&i! style
1. +rior to talent / expertise rather than experience / age. 6&is is &o' &e 8.+t: t&e senio$ity
0. >ransparency across organi.ation.
;. >rust < "espect
B. !ynchroni.ation of tought- said and action
8. 012 5?ecution E 0D !trategy
14
What key that CEs shoul!"shall ha#e$
1& 5e trans%arent and e4-lain 2o(!self in *lea!+ l(*id te!)s&
2& Do as you say you are !oin&&
3& 'isten first and then thin$
15
(hosn)s actions to safe Nissan *y cost sa#in&:
1& 'han"in" !elationshi-s ,ith s(--lie!s 6none ,e!e off7li)its8
2& 9ed(*in" staff o.e!heads
3& 'losin" non.iable -lants and eli)inatin" non-!ofitable -!od(*ts
4& Debt !ed(*tion
5& Establishin" *lea! -a27fo!7-e!fo!)an*e "(idelines fo! all
e)-lo2ees+ in*l(din" e4e*(ti.es
6& Establishin" a *lea! leade!shi- s(**ession -lan fo! the lon" te!)&
16
!he result of NRP
1.=$od+.ti)ity $ised by $o+nd 20% (19 #ont&s fte$ N>= 's l+n.&ed)
2.Sles 2$e' by 4% (t t&e finn.il ye$*end 2000)
3.?+n.&ed 22 ne' #odels (t t&e finn.il ye$*end 2000)
4.=+$.&sin2 .ost 's $ed+.ed by 11%
,.3n+f.t+$in2 +tili@tion 's i#!$o)ed f$o# ,1 to 74%
/.-#!loyees7 1A12;C (1999) 127/2, (2002)
7.Aent$li@tion of t&e finn.il #n2e#ent; f$o# 200 to 1, bn%s
8.9inn.il
17
.is'a- Y$ar 2333 .is'a- Y$ar 1000
Net ales 7+429&2 billion 2en 5+977&1 billion 2en
:-e!atin" ;n*o)e 829&4 billion 2en 82&6 billion 2en
:-e!atin" Ma!"in 11&2< 1&4<
Net ;n*o)e 5%3&7 billion 2en 7 684&4 billion 2en
0otal Net Debt 13&6 billion 2en 1+348&7 billion 2en
0otal =ssets 7+859&9 billion 2en 6+541&2 billion 2en
18
+,RP +,CFT
OUR GHOSN
19
2%