Carlos Ghosn (17) Gaining depth with the Renault-Nissan Alliance
Ghosn discovers the challenges and rewards of heading two carmakers
By the year through March 2006, Nissan 180 had ended, and we were in the first year of the next medium-term plan: Nissan Value-Up. For the first time, our recovery was starting to lose momentum. Some attributed this to a bounce-back effect after reaching the Nissan 180 goal of increasing global sales by 1 million vehicles. Other causes seemed to be affecting the industry at large, brought on by emerging technologies, shifting consumer preferences, high oil prices and the entry of new competition from regions like China and India.
I wasn't worried. The morale of employees was high, and they continued to work hard toward achieving our next set of goals.
This was my first year as the leader of both Nissan Motor and Renault. I would spend the first week of the month at Renault and the third week at Nissan. In between, I would visit other regions as needed, traveling to the U.S., China, Russia, South America and various European countries.
Serving as the top executive of two large companies simultaneously was unique and especially challenging, but it had its rewards. I had to be constantly mindful that Renault was one company and Nissan was another. Each had its own decision-making body, board of directors, shareholders and so on. We never made a decision about Renault in Tokyo, and we never made a decision about Nissan in Paris. These two companies had nothing in common except the willingness to cooperate in some areas for the good of both. I carried separate briefcases and had separate schedulers; the job organized itself.
The other challenge was making sure to always weigh the interests of Renault and Nissan equally. I allocated my time between the companies 50-50 and made sure it was clearly logged and transparent to all employees.
This is what made the Renault-Nissan Alliance different than an acquisition or merger. An "alliance" was a new, third type of business relationship, which fostered a deep sense of belonging. It was important that no one feel as though they were compromising or sacrificing as a result of the alliance. But while I was adamant that the companies remain distinct entities, we also sought for Nissan and Renault to share information and development resources to maximize performance and leverage synergies.
Because of the alliance, Nissan was able to enhance an important skill: working in a multicultural environment. Nissan experienced the full range of global cooperation with Renault, such as sharing in purchasing, technology, production, information technology and integration in human resources. The cross-cultural sharing has been just as important as our business synergies. The alliance between Renault and Nissan works because both the Japanese and French put forth an equal amount of effort to make it work.
The alliance helped Nissan open its doors to the world while maintaining its identity. It hasn't always been easy, but it's what has positioned us to compete in today's auto industry. In the years to follow, this would become even more critical.
Carlos Ghosn is chairman and CEO of Nissan Motor Co., Ltd.
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