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The Rise and Fall of Carlos Ghosn: Part 1

What turned one of the world’s most visionary CEOs into a fugitive?

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When Japan’s most famous CEO is suddenly arrested, conflicts are revealed in the Renault-Nissan Alliance, the French and Japanese auto companies that he led for two decades. Then Carlos Ghosn jumps bail by stowing away in a private jet to Lebanon. His daring escape raises new questions about his alleged financial misconduct and the corporate system that kept him in power. What went right — and wrong — at Nissan? How did Carlos Ghosn go from being one of the world’s most admired CEOs to a fugitive from justice?

This first episode of a four-part special series tells the story of his dramatic turnarounds at Renault and Nissan. Host Curt Nickisch explores Ghosn’s successes, discovering insights on working across cultural divides, winning buy-in on painful changes, and using outsider status to your advantage.

This special series is inspired and informed by the new book Collision Course: Carlos Ghosn and the Culture Wars That Upended an Auto Empire .

This episode was produced by Anne Saini. Contributing reporting from Tokyo by Collision Course coauthors Hans Greimel and William Sposato.

Editing by Scott Berinato, Maureen Hoch, and Adi Ignatius. Sound engineering by Tim Skoog. The team includes Sally Ashworth, Adam Buchholz, Rob Eckhardt, Ramsey Khabbaz, Scott LaPierre, Christine Liu, Melinda Merino, and Karen Player.

[SOUND OF 8 JANUARY 2020 PRESS CONFERENCE IN BEIRUT, LEBANON]

CARLOS GHOSN AT PRESS CONFERENCE: We’re going to try. Okay. Please, if we can, if we can have a little bit of calm and shut down the door, OK.

CURT NICKISCH: On January 8 last year, Carlos Ghosn summoned the world’s media to an upscale club on the Beirut waterfront to explain himself.

SOUND OF CARLOS GHOSN AT PRESS CONFERENCE: OK, so we have the Lebanese here. Where are the Lebanese? Where are the Lebanese? Everywhere. Everywhere. OK. So where are the French? OK, La France est ici . Where is Japan? Japan is here, very good. Dubai–

HANS GREIMEL: But it was a bit of a media circus, actually.

CURT NICKISCH: That’s journalist Hans Greimel, coauthor of a new book on Ghosn called Collision Course . He remembers how throngs of reporters were locked outside, even though they’d flown in from Dubai or Detroit — or Tokyo, like him. He and about 100 other reporters were allowed into the room with Ghosn.

HANS GREIMEL: Once they were inside that room, you know, all hell broke loose when they wanted to get attention from Ghosn.

[SOUND OF JOURNALIST SPEAKING IN FRENCH AT PRESS CONFERENCE]

HANS GREIMEL: I mean, during the Q&A it was like survival of the fittest. Everybody was jostling for that microphone, yanking it out of people’s hands, shouting over each other.

[PRESS CONFERENCE SOUND OF CARLOS GHOSN SPEAKING IN ARABIC AND JOURNALIST SPEAKING IN FRENCH]

CURT NICKISCH: Just ten days earlier, the former CEO of Nissan and Renault was awaiting trial in Tokyo, facing years in prison for alleged financial misconduct. That’s when he jumped bail, stowed away in a music equipment box, and escaped in a private jet to Lebanon. It’s where he grew up. It’s also a place that does not have an extradition treaty with Japan.

[PRESS CONFERENCE SOUND OF CARLOS GHOSN CALLING ON HANS GREIMEL]

CURT NICKISCH: Hans Greimel was able to get in a question when Ghosn called on him. As the Asia editor for Automotive News, Hans has covered Ghosn for years.

HANS GREIMEL AT PRESS CONFERENCE: No, I’m Hans.

CARLOS GHOSN AT PRESS CONFERENCE: He’s Hans.

HANS GREIMEL AT PRESS CONFERENCE: Thank you, Mr. Ghosn. I have a couple of questions. The first one is about, you paint a really sorry picture about the state of the Alliance and–

HANS GREIMEL: But you know, Ghosn is a pro at this, and he was lapping it up. I mean, you could tell that he really liked the attention, and he was in his element.

CURT NICKISCH: Why do you say that?

HANS GREIMEL: Well, he’s just, you know, he was charismatic. He’s a showman. He’s a communicator. That’s his element, to be on a stage like that, fielding questions. I mean, you have to remember, this was a year, more than a year, he was media starved. Suddenly he was the center of global attention. So this is his element.

CURT NICKISCH: Carlos Ghosn was the man who had taken one of Japan’s iconic brands from the brink of bankruptcy back to prominence. He was the CEO of Nissan and Renault at the same time. When he was opening factories or debuting new models, people marveled at his charisma and command of numbers and details and languages, answering questions on the fly in French, English, Arabic, and Portuguese. Now, here he was doing exactly the same thing, even using a slide deck. Except this time, instead of marketing a new car model or a strategic growth plan, he was marketing his innocence.

CARLOS GHOSN AT PRESS CONFERENCE: As you can imagine, today is a very important day for me. One, that I have looked forward to every single day for more than 400 days. Since I was brutally taken from my world as I knew it.

CURT NICKISCH: Japanese authorities arrested the celebrated CEO in 2018. For months, they interrogated him in jail. Then they charged him with hiding his pay and misusing millions of dollars of Nissan company money. But Ghosn told that packed room in Beirut he was convinced he would not get a fair trial in Japan.

CARLOS GHOSN AT PRESS CONFERENCE: I felt I was a hostage of a country that I have served for 17 years. I dedicated my professional life. I was proud of it. I revived a company that nobody else before me was able to do for ten years. They were in the dirt. I brought them for 17 years, I was considered as a role model in Japan. More than 20 books of management were written about me. And like this, in a minute, all of a sudden, a few prosecutors and a bunch of executives of Nissan said, you know what? This guy is a cold, cold, greedy dictator. That’s what they said. Cold, greedy dictator.

CURT NICKISCH: Here’s what people used to call Carlos Ghosn. Inspirational manager, turnaround savant, transformational leader, savior of Japanese industry, visionary. Now, he was a fugitive.

HANS GREIMEL: I still cannot believe that Carlos Ghosn was arrested, thrown in jail, indicted four times, out on bail, and then escaped Japan in a box. It just blows my mind even today going on nearly three years later.

CURT NICKISCH: What went wrong at Nissan? How did Carlos Ghosn go from being one of the world’s most admired CEOs to a fugitive from justice? Over four episodes, this podcast series is going to find out. It turns out, there’s a to learn in his story about the nature of management, corporations, and people. And yes, we will hear from Ghosn himself. This is The Rise and Fall of Carols Ghosn , a special series of the HBR IdeaCast from Harvard Business Review. I’m Curt Nickisch.

CURT NICKISCH: A good place to start the story of what went right and what went wrong during Carlos Ghosn’s time at Nissan is with the person who put him there.

[SOUND OF OUTGOING VOICEMAIL MESSAGE IN FRENCH]

CURT NICKISCH: After a few voicemails and emails, he was on the line.

LOUIS SCHWEITZER: Oh, OK, my name is Louis Schweitzer. I am now 78 years old. And I have had a varied career, civil servant, company, and not-for-profit institutions.

CURT NICKISCH: That’s a modest way of putting it. Louis Schweitzer was the chief of staff for a prime minister of France before going to Renault. He became the chair and CEO of the French carmaker in 1992, a position he would hold for 13 years. For a long time, though, he didn’t know who was going to take his place when he left.

LOUIS SCHWEITZER: There were very good people within Renault, but none that I considered able to become the CEO.

CURT NICKISCH: And Schweitzer needed a deputy. Renault was in debt, in danger of bankruptcy. Critics called it a bloated ward of the French state. Company operations needed reform. It was a big job. And Schweitzer needed new blood to help him turn the company around. So he did what you do in these situations. He hired a headhunter, who told him: There’s this guy in his early 40s called Carlos Ghosn. He’s Lebanese, born in Brazil, then raised in Lebanon, and educated at the top universities in France. Currently in South Carolina running US operations for Michelin, the French tiremaker. Quite an extraordinary guy. You should talk to him.

LOUIS SCHWEITZER: So I had him come to my office on a Saturday. I remember it was a Saturday morning. We spent around two hours together. And I was immediately convinced that he was the man I was looking for.

CURT NICKISCH: You knew that right then, within a couple of hours?

LOUIS SCHWEITZER: Yeah. Well, he was a very impressive person. Intelligent, of course, but you see a lot of intelligent people. But with a stamina, a drive, an intensity, if I may say so, which I found quite extraordinary. I told him immediately that if he succeeded, he would be my successor.

CURT NICKISCH: And succeed he did. It’s where the legend of Carlos Ghosn starts to take hold. Rick Johnson was a reporter for Automotive News back then.

RICK JOHNSON: The first thing I remember hearing about Ghosn, I think it was in ’97, and he had, he’d come over from Michelin in a senior executive position, still about 35 years old, or whatever he was. And he closed a plant in Belgium, in Vilvoorde. You know, unlike in the U.S. in those days, in Europe, you just don’t close plants to cut costs. And he laid off 3,300 workers, and there were riots in Belgium. It was unbelievable. But it was a key move.

CURT NICKISCH: Ghosn was much more than a slash and burn executive taking a hatchet to the workforce. Over three years, the company undertook huge organizational changes. It standardized parts. It streamlined production. It centralized R&D so that new car concepts would become reality faster. Louis Schweitzer says Ghosn was super-rational, super numbers-driven, extremely good at the financials. But he wasn’t just an analytical wiz. He was a great motivator of people, too.

LOUIS SCHWEITZER: Well, I would say he had a very specific art of management. He took people from different lines, had them work together, had a way of pushing them very much. He was not friendly in any manner. I mean, you know, he was not slapping people on the back and so forth. But he gave them confidence and had a way of driving them to give more than they thought they would be able to give.

CURT NICKISCH: Within three years, Renault was in a totally different competitive position. It went from being on the brink of bankruptcy to having billions in the bank. Ghosn’s comprehensive plan was so successful, people started calling him “Le Cost Killer.” In the car industry, Ghosn was making a name for himself in a very distinctive way.

SONARI GLINTON: He does not seem like a creature of the auto industry.

CURT NICKISCH: That’s Sonari Glinton. He used to be the auto industry reporter for National Public Radio in the U.S.

SONARI GLINTON: There are only two people in the auto industry in the decade or change that I was in it that I thought: This dude is a thinker. It was Sergio Marchionne and Carlos Ghosn. He was an intellectual. That’s the other thing. He’s like an intellectual running a car company. That’s the difference. That is what makes him different from other folks.

CURT NICKISCH: Glinton says the auto industry is full of executives who are stereotypical car guys, or often engineers who make their way up the ranks to the C-suite. Ghosn just stood out.

SONARI GLINTON: The average height of a CEO was definitely like over 5’11”. [NEARLY TWO METERS]. He is not. I don’t know how tall he is, but I know he is not a tall, imposing person. And he makes up for that by like being genuinely gregarious, interested in you, sort of hyper-focused. You know, he has these like really bushy eyebrows. And he’s just like a small, intense person. But small, intense, gregarious. Like, the person that kind of leans in a little much.

CURT NICKISCH: After this turnaround effort, Ghosn was ready to lean into a new challenge, and CEO Louis Schweitzer was drumming one up for him. Renault had gone from years of heavy losses to sound financial health. But it still had a strategic challenge. As Schweitzer puts it, Renault was:

LOUIS SCHWEITZER: Too small, too French, too alone.

CURT NICKISCH: And this was at a time of consolidation in the industry. Making cars is expensive, and big firms were teaming up with others to try to save money and reach more buyers. The blockbuster deal at that time was the so-called “merger of equals” between Mercedes Benz in Germany and Chrysler in the US. The pressure was on.

LOUIS SCHWEITZER: And we felt we could not stay there and just be spectators. So we started negotiating with Nissan, with the then CEO of Nissan, Mr. Hanawa.

CURT NICKISCH: Now, by the rules of anything, this should not have been happening. Renault was tiny in comparison. Nissan was exporting millions of cars around the world. But Nissan was in trouble. It needed money, and more than that, it needed a turnaround. A turnaround like Renault’s.

LOUIS SCHWEITZER: One major point is, I told Mr. Hanawa, look, I think it’s important that you meet Carlos Ghosn. And your team meets Carlos Ghosn.

CURT NICKISCH: Why did you say that?

LOUIS SCHWEITZER: Because, of course, Nissan was losing heaps of money. So they needed somebody to cut their costs. And massively. And Ghosn was a fairly impressive guy. And I think he was a trump.

CURT NICKISCH: A trump card, an ace in the hole. In fact, Schweitzer says that without Carlos Ghosn, he would not have done this deal. Which, I don’t know, can we just list all the things that seem unlikely about this? First, it’s sending a senior executive from France to go to Japan and help them do a better job of making cars. This is how that sounds to Sonari Glinton.

SONARI GLINTON: Yes. I will go to Japan and run a car company. It was like, to me, that feels like I’m going to go to France and teach them how to make baguettes.

CURT NICKISCH: Second, Japan had very few foreign executives. Some of those tenures were big failures. There just wasn’t much of a playbook to copy. You know, the Foreign Executive Handbook to Parachuting into Japan . Third, there are big cultural differences between a French firm and a Japanese firm. And finally, you put up $5 billion for a company. That’s how much Renault invested in Nissan. And all that is riding on one dude. I mean, if Schweitzer thinks no one else can do the job, why is he so sure that Carlos Ghosn can?

LOUIS SCHWEITZER: I discussed with Carlos before him leaving for Tokyo after the deal was made. I told him: Look, of course, if you do not succeed, we will both lose our jobs.

CURT NICKISCH: Coming up after the break —

HIROTO SAIKAWA: I felt very strongly, oh my goodness, company start changing. So we need to catch up.

CURT NICKISCH: That’s when the rise and fall of Carlos Ghosn continues.

CURT NICKISCH: Ten years down the road, Carlos Ghosn was telling business students at Stanford about his Japanese beginning.

UNIDENTIFIED MODERATOR AT STANFORD TALK: Can you tell us a little bit about what your first day at Nissan was like? I mean, what do you do in that situation?

CARLOS GHOSN AT STANFORD TALK: Well, you’re going to be disappointed, because you know, when you arrive the first day, first day you arrive in Japan, I didn’t speak Japanese. I didn’t know too much about Japan. I obviously had Japan in the back of my mind, because of the importance of Japan in the car industry. And the first day I arrived, I also was looking for my translator, because without my translator, I could not do anything, just to get to know her. How do you make a phone call?

CURT NICKISCH: Carlos Ghosn spent his first months there doing the classic listening tour of a new executive: visiting plants and facilities, driving Nissan cars at racetracks, meeting with employees all around the globe. And everywhere he went, the workers were left to wonder, what is this guy going to do when he stops listening and starts talking? So there was a lot of anticipation for the eve of the 1999 Tokyo auto show when Ghosn announced the Nissan revival plan, with the Japanese CEO [YOSHIKAZU HANAWA] looking on.

RICK JOHNSON: He sounded like a prosecutor.

CURT NICKISCH: Rick Johnson was there covering it.

RICK JOHNSON: I mean, all the things that Nissan had done wrong over the previous decade, all the mistakes it had made, while [NISSAN CEO] Hanawa-san just kind of stood by his side, you know stone-faced, and listened. And we all just kind of sat there dumbfounded.

SOUND OF CARLOS GHOSN AT PRESS CONFERENCE: We are car manufacturers. And as long as we are not able to put in a consistent manner attractive, exciting cars, technologically advanced cars, our revival will be precarious.

RICK JOHNSON: He just ripped Nissan’s performance to shreds, and then just, the fact that a European executive had come over here and dressed down Nissan’s leadership like he did just kind of stunned us.

CURT NICKISCH: Yeah, I mean, that would be shocking anywhere, right? In the Japanese context, was that even more of a –-

RICK JOHNSON: Oh, yeah, absolutely. I mean, I remember looking, I remember exactly where I stood, and I would look around at the room, the Japanese press, hundreds and hundreds of Japanese press. And they just, the looks on their face, I just couldn’t believe it. You know, it’s amazing.

CURT NICKISCH: To some reporters at the Royal Park Hotel press conference, it sure seemed like Carlos Ghosn was getting off on the wrong foot.

SOUND OF AUTOMOTIVE JOURNALIST PAUL EISENSTEIN AT PRESS CONFERENCE: What type of problems do you expect to face getting workers to go along, getting the people of the country to go along, especially seeing many of these cuts ordered by primarily what they will see as an outsider?

SOUND OF CARLOS GHOSN AT PRESS CONFERENCE: People in Nissan have really enough of struggling with unprofitable company, company losing market share.

CURT NICKISCH: It was a harsh message. Especially coming from this foreigner who didn’t seem to follow, much less understand the local customs. Ghosn also made some pretty ambitious promises: to cut costs by nearly $9 billion, to keep charging ahead with the development of new models, and to return Nissan to profitability within a year. To find out how he did, I turned to the person who analyzed this bid about as closely as anyone.

MASAKO EGAWA: I am Masako Egawa, specially-appointed professor at the Hitotsubashi University. And before, I was executive vice president at University of Tokyo.

CURT NICKISCH: And Masako Egawa wrote the Harvard Business School case study titled: Implementing the Nissan Renewal Plan . For that research, she interviewed Ghosn. It was April 2002, and she remembers him being so focused and on point.

MASAKO EGAWA: I was very impressed by his responses as well as his achievement.

CURT NICKISCH: Here’s what she found. Ghosn implemented a bunch of changes to save money, closing unprofitable factories, getting better deals from suppliers, selling off holdings in other companies. But he also made two simple changes to Nissan’s culture that had a profound effect. The first had to do with how employees worked together.

MASAKO EGAWA: He was able to unleash the power of the middle managers by forming cross-functional teams, and then got ideas to improve the company from the internal people.

CURT NICKISCH: This is really important. Egawa says that Nissan had had a blame culture. Sales or quality control or design, it was always somebody else’s fault, never your department. By putting managers from different departments on the same teams, there was nowhere to deflect anymore. Then he made another simple change.

MASAKO EGAWA: He delivered on commitments. Nissan, of course, had budgets and plans, but they were often missed. But he brought over the concept of commitment, which is, you have to really deliver on your promises. So he changed that culture of the company.

CURT NICKISCH: Yeah. The case was just fascinating, because it has some great quotes from middle managers, like you said. Like somebody in purchasing who had to go in to talk to people in engineering and figure out how to save money there. And there was just an amazing quote where they said: You know, it was so nerve-wracking and anxiety-producing and really, really hard to do. And then what we ended up proposing for like 20% cost cuts were kind of obvious. Just kind of showed how possible it was, and how long Nissan had been overlooking the obvious.

MASAKO EGAWA: That’s correct. So there was a lot of siloes, and he was able to break it down through cross-functional teams.

CURT NICKISCH: So if it was obvious, was it hard to do?

MASAKO EGAWA: Well, I think there were a lot of politics within the company. And I think internal people probably knew what to do, but could not act. So it was unfortunate that the company needed outsider to break the siloes. But I think that’s exactly what happened.

CURT NICKISCH: That’s exactly how Hiroto Saikawa remembers it. At the time, he was in purchasing at Nissan, and he says it was an exciting period.

HIROTO SEIKOWA: Actually, everybody understands that the company should evolve, and we should be more internationalized. But we couldn’t tell how. But now, first step, second step is instructed by Mr. Ghosn. So things are getting a bit more clear from out of the foggy situation. So in that sense, I felt very strongly, oh my goodness, company start changing. So we need to catch up.

CURT NICKISCH: The changes were incredibly effective. Within two years, just like at Renault, Ghosn had Nissan cruising in the black. Targets were met and smashed ahead of schedule. In 2001, Nissan’s operating profit was $3.6 billion. That was more than two-thirds higher the year before. I mean, in an industrial company that’s basically an overnight success. Ghosn got a new nickname to update “Le Cost Killer:” “Mr. Fix-It.” So here’s a question. Did Carlos Ghosn fix Nissan because he was an outsider? Or despite being one? Because on the one hand, he downplays any outsider role. This is what he told business students later.

CARLOS GHOSN AT STANFORD TALK: I wanted really the plan to be Nissan plan, made by Nissan. I mean, I didn’t even want the Renault people to be involved into the turnaround, the revival plan of Nissan. I wanted it to be done by the Nissan people, mainly by Japanese people.

CURT NICKISCH: Hearing him say that, it’s almost as if Ghosn considers himself a catalyst tossed into a chemical reaction. Not changing the outcome, just making it easier and faster for the elements to recombine the way they would anyway.

CARLOS GHOSN AT STANFORD TALK: When the plan was decided and people knew that it was their own ideas, obviously remodeled, that were going to be implemented, I had the complete buy-in.

UNIDENTIFIED MODERATOR AT STANFORD TALK: So can you tell us a little bit about what you did differently, or how you helped Nissan help itself.

CARLOS GHOSN AT STANDFORD TALK: Let me tell you. No matter what is the company which is in trouble, my experience shows me that you don’t need to look for the solution outside. It’s inside. It is. It is always inside. You just need to look for it.

CURT NICKISCH: On the other hand, Ghosn was not trying to blend in inside, not even close. Like at one press conference, he didn’t bow. He was asked about it, and he said: I don’t have time to learn Japanese customs.

JOHN HARRIS: Often we were working through interpreters, interpreting the Japanese.

CURT NICKISCH: John Harris, who was Ghosn’s speechwriter, remembers how Ghosn would speak just incredibly fast.

JOHN HARRIS: He’d listen to the Japanese track of the interpretation, and the interpreter would go: [HARRIS MIMICS RAPID SPEAKING]. And then they’d switch interpreters, and the next interpreter would come, and he’d wear them out.

CURT NICKISCH: [LAUGHTER] Tag teaming interpreters. Yeah.

JOHN HARRIS: And it was having a very detrimental effect on people’s understanding what he’s saying.

CURT NICKISCH: It wasn’t like Ghosn was trying to meet Japanese workers where they’re at. He was almost the classic pace-setting boss, trying to coax and urge the whole company to keep up with him.

MASAKO EGAWA: In this situation, being outsider was a great advantage.

CURT NICKISCH: Hitotsubashi University professor Masako Egawa says that gave him the freedom to become a change agent.

MASAKO EGAWA: I suspect he may have even used his ignorance of Japanese culture to his advantage when he had to impose difficult decisions.

CURT NICKISCH: Like that Nissan Revival press conference where Ghosn criticized Nissan management with Hanawa, the CEO, standing right there, not exactly saving face. Ghosn was sending a strong signal that change was real. Still, why didn’t it backfire on him like it had for other foreign CEOs who were oblivious to how things worked in Japan? I posed that question to Sadaaki Numata, a former Japanese ambassador and negotiator of auto export deals.

SADAAKI NUMATA: Well, that’s a good question, because we are talking about foreign executives now. But it’s also true that Japan was under occupation by the Allied Forces. General MacArthur came to occupy Japan. He wasn’t the one to bow. He was very tall as well.

CURT NICKISCH: Yeah, there’s a famous picture of him next to the emperor [Hirohito] where he’s just, where he’s standing so relaxed. Right? His arms are behind him, and you can tell who’s in charge.

SADAAKI NUMATA: That’s right. And that image, I think, stayed in the minds of the Japanese. I’m sure it stayed in the minds of Japanese businessmen as well.

RICK JOHNSON: He didn’t look like, this is going to sound weird,

CURT NICKISCH: Automotive journalist Rick Johnson.

RICK JOHNSON: He didn’t look like a big blond American or German executive. He was very short. He was sort of short, dark-haired. He just sort of blended in physically.

CURT NICKISCH: And he wasn’t French, either. He was Lebanese, born in Brazil, raised in Lebanon, studied in France, worked in the US. He later called himself a citizen of the world. Here’s Renault CEO Louis Schweitzer:

LOUIS SCHWEITZER: Probably one of the factors in favor of Ghosn is that he was multicultural by himself. You know, you have multicultural nations, but there you have a multicultural man.

CURT NICKISCH: Add to that the team that Renault sent with Ghosn to Nissan. Usually, in rescues or mergers, hundreds of people will get relocated to that company headquarters and kind of take it over. Overnight the place will have an entirely different feel. Schweitzer says Ghosn went to Tokyo with just 30 people. Don’t get me wrong, these were top people. Ghosn called them his Samurai, his Musketeers. But not even a busload to help run one of the largest companies in Japan. It was a very deliberate touch to try to avoid creating cultural frictions. Johnson considers it a tour de force.

RICK JOHNSON: I mean, it was so well done, so perfectly done. Just sort of eased into it and just merged parts of the company, brought parts of the company together. And it wasn’t a full-scale, it was an alliance, is what they called it. It wasn’t a merger. It was just a marvel. It was the perfect way to bring two disparate companies together.

CURT NICKISCH: It also gave Carlos Ghosn an air of perfection. Against all odds and expectations, he’d brought Nissan back to strength and greatness. I mean, this was a signature Japanese company. Cars, after all, are a powerful symbol of the country’s economic rebound after defeat and disgrace in World War II. In the few decades after 1945, Japan had gone from atomic destruction to a global economic powerhouse. And Ghosn helped maintain that legacy, that national story. Johnson remembers the turnaround made Ghosn into an A-list celebrity in Tokyo.

RICK JOHNSON: You know, there were graphic novels written in Japan about him. And they did polls, and he was like, Japanese women picked him as the most desirable husband they could think of. And people would touch his clothes like he was going to cure their illness or something in Tokyo.

CURT NICKISCH: Really?

RICK JOHNSON: I mean, he was pure legend.

CURT NICKISCH: Really? Did you see that? Did you see people —

RICK JOHNSON: I remember the guy who told me that. He was named Jean-Baptiste Duzan who was head of purchasing at Renault and then became part of this small klatch of people who went to Tokyo to help with Nissan, and I remember him talking about that.

CURT NICKISCH: It wasn’t just that Ghosn was the savior of Nissan.

YUUICHIRO NAKAJIMA: Having a foreigner parachuted in at the top was, I think, a huge shift in paradigm.

CURT NICKISCH: Yuuichiro Nakajima is a consultant for mergers and acquisitions with Japanese companies. And he was thrilled that someone had finally cracked the code of bringing new management practices into Japan.

YUUICHIRO NAKAJIMA: What Carlos Ghosn did was jolt the slumbering nation and industry that Japan had become out of that state of slumber and do something more innovative and more exciting and take bigger risks and so on. You know, using foreign expertise and foreign capital to sort out a very troubled industrial group like Nissan, was in a way quite exciting.

CURT NICKISCH: After all, he thought, Ghosn’s young. Not even 50 years old. He could change the face of the Japanese auto industry and maybe even transform how global business is done. Why stop at Nissan?

Coming up in the next episode, Carlos Ghosn takes on more ambitious goals and loftier roles, to the concern of others.

LOUIS SCHWEITZER: Two different companies, 10,000 kilometers apart, you cannot manage. The fact that he wanted to be the chairman and CEO of Renault and Nissan, and at one point of time between 2005 and 2009 he wanted also to have General Motors. You know, it showed that he had lost touch with reality.

CURT NICKISCH: This episode was produced by Ann Sani. Contributing reporting from Tokyo by Hans Greimel and William Sposato. Their new book is Collision Course: Carlos Ghosn and the Culture Wars That Upended an Auto Empire .

Our editors are Scott Berinato, Maureen Hoch, and Adi Ignatius. Sound engineering by Tim Skoog. Our team includes Sally Ashworth, Adam Buchholz, Rob Eckhardt, Ramsey Khabbaz, Scott LaPierre, Christine Liu, Melinda Merino, and Karen Player. I’m Curt Nickisch.

Please join us for the next episode of The Rise and Fall of Carlos Ghosn , a special series of the HBR IdeaCast from Harvard Business Review.

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Carlos Ghosn (12) Mapping out a plan to save Nissan

Seeing losses everywhere, Ghosn rejects the first X-Trail, initiates huge cost cuts

The first order of business when I joined Nissan Motor was to build a plan for its recovery. At the time, Nissan was in a desperate situation. The company's share of the Japanese market had been steadily falling for 26 years. Financially, it had been in the red for seven of the eight years through 1999. Interest-bearing debt was more than 2 trillion yen ($17 billion at current rates). Because of this, the release of new models had slowed almost to a stop.

How did Nissan find itself in such a hole? One reason was that the company had simply not valued profits. Back in 1999, Nissan offered 43 models, but saw profits for only four of them, and small ones at that. I remember one executive meeting early on in my tenure in which I rejected the development plan for a new model called the X-Trail.

Carlos Ghosn (13) A whole new Nissan (almost) overnight

Carlos ghosn (14) the meaning behind nissan 180, latest on my personal history: carlos ghosn, the many lessons of ghosn-sensei, carlos ghosn (30) a glimpse of the future, carlos ghosn (29) the next generation, sponsored content, about sponsored content this content was commissioned by nikkei's global business bureau..

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Leadership After Carlos Ghosn

For many years I have been teaching the case study about Carlos Ghosn and the Nissan revival plan and I was saddened by the turn of events which led to Mr. Ghosn’s arrest in November, 2018 and the charges filed against him. I do not have the information or the legal training to have an opinion about the facts in Mr. Ghosn’s case but what is clear is that in his absence, the company that he led has been adrift.

The company is in the news due to the appointment of a new CEO last week after Mr. Ghosn’s successor was forced to resign after irregularities were discovered concerning his compensation in an echo of the charges filed against Mr Ghosn.

In my view there is really nothing deeply wrong about Nissan’s fundamentals. True, their sales were down about 5% globally last year due to problems in the US and Europe which I understand had different reasons. They did grow the business a bit in China which is probably one of the reasons Makoto Uchida was chosen as CEO since he was leading the JV in China.

Nissan, however, has a solid fleet of vehicles, great dealer networks around the world, good brands, and a lead in electric vehicles compared to many of all the other large, mid market manufacturers. The new Leaf is still probably the best car for the money and is significantly lighter than the flashier Tesla Model 3. 

The problem at Nissan is governance and morale. Ever since Carlos Ghosn launched the Nissan Revival Plan in 1999, Nissan has been linked with the personality and drive of Mr. Ghosn. Nissan has been tremendously successful over the last 20 years thanks to his ability to keep the company focused on delivering a series of medium term plans. He built a culture where people “do what they say and say what they do” and my perception is that after his removal there simply was not the same kind of drive from the top causing some targets to slip and some problems to fester.

The Nissan Leaf was one of three commitments he made in 2007 as part of the Nissan GT 2012 and the full story of its development makes another great case study. As mentioned in another post this week, the new Leaf is the number three selling EV in the world and Nissan sold about 85,000 Leafs in its fiscal year 2018/19.

In the Video he released last April, Ghosn insisted in his innocence on all charges and also the idea that he was a greedy dictator. He says that his arrest was the result of a conspiracy by Sr. Nissan executives who feared they would lose autonomy and position in the next phase of the alliance with Renault. He also insisted that management by committee was insufficient in the fast moving and competitive automotive industry and real leadership was needed.

Nissan has responded by apparently strengthening its corporate governance with an external chairman. That new Board has now chosen Uchida but also named two of his rivals for the CEO position as COO and Vice COO creating the kind of committee approach that Ghosn warned against in April. 

If Uchida and his colleagues are going to be successful they will need to deliver Nissan’s current plan of MOVE to 2022 and even more importantly heed Mr. Ghosn’s advice and articulate a vision for the company (and the alliance) in the future. Back in 2007, Mr. Ghosn publicly reversed himself on the issue of electric vehicles and pushed both Nissan and Renault to develop what became the Leaf and the Zoe.

If Nissan is going to survive and prosper I humbly suggest that Uchida and his colleagues make sustainability and electric vehicles an integral part of that vision.

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Implementing the Nissan Renewal Plan

By: Michael Y. Yoshino, Masako Egawa

Carlos Ghosn, a former executive vice-president of Renault, became the COO of Nissan Motor Co., a troubled auto company in Japan when Renault bought 38% of the company in 1999. This case deals with…

• Length: 9 page(s)
• Publication Date: Feb 25, 2003
• Discipline: General Management
• Product #: 303111-PDF-ENG

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Carlos Ghosn, a former executive vice-president of Renault, became the COO of Nissan Motor Co., a troubled auto company in Japan when Renault bought 38% of the company in 1999. This case deals with how Ghosn turned the company around. Examines in considerable detail how he went about successfully energizing and mobilizing the demoralized employees after a decade of failed efforts. A rewritten version of an earlier case.

Feb 25, 2003 (Revised: Jun 1, 2006)

Discipline:

General Management

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Automotive industry

Harvard Business School

303111-PDF-ENG

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Nissan News Alerts

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Nissan unveils Revival Plan

October 18, 1999

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Nissan to end Revival Plan early; new strategy begins in April

By JAMES B. TREECE

Automotive News

TOKYO - The Nissan Revival Plan (NRP) will conclude at the end of March, one year ahead of schedule, and Nissan is launching its next strategic plan a year early, Nissan Motor Co. President Carlos Ghosn said Friday.

Speaking to a group of 1,200 suppliers in Tokyo, Ghosn said that the new plan, dubbed NISSAN 180, will call for 15 percent purchasing-cost reductions over a three-year period starting April 2002. The reductions are expected to be spread evenly over the three years, rather than front-loaded as was the case for the NRP's 20-percent purchasing-cost reduction target.

In addition, Nissan aims to sell 1 million more cars and trucks by the end of its 2004 fiscal year, compared to levels in the current fiscal 2001 which ends March 31, 2002. Of the additional 1 million sales, Nissan is aiming for 300,000 in the United States, 300,000 in Japan, 100,000 in Europe, and 300,000 in other markets.

As previously reported, NISSAN 180 has three key targets, symbolized by the numbers 1, 8, and 0:

1. Sell 1 million more vehicles,

2. Achieve an operating profit margin of 8 percent, and

3. Reduce debt towards zero. Nissan has said that means reducing debt to a level where Nissan can pursue business plans such as new-model development without constraint from debt concerns.

Ghosn said that further details of NISSAN 180 would be revealed when Nissan releases its financial results for the current fiscal year. Those results are expected in April or May.

The Nissan Revival Plan, unveiled amid great fanfare as a three-year plan in October 1999, also had three key targets, all of which have been achieved:

1. Post a net consolidated profit in the fiscal year ended March 2001,

2. Achieve an operating margin of at least 4.5 percent, and

3. Reduce net consolidated automotive debt to no more than 700 billion yen, or $5.4 billion at current exchange rates, by March 2003.

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Finally! Nissan About To Announce American Revival Plan

Its future depends on this new plan.

Nissan faced problems even prior to the ousting of now-former CEO Carlos Ghosn, but these issues were exacerbated following his departure. The carmaker is lacking new products in the always important North American market and its dealerships have made this a key issue. The current lineup is aging fast. The Nissan Frontier , for example, dates back to 2004 (although it'll reportedly be replaced next year). The next-generation Nissan Rogue is also just around the corner. The average age of a Nissan in the US is over 5 years. That number needs to be lowered to 3.5. A detailed plan is needed to accomplish this and more.

Reuters claims it has received the first details regarding Nissan's revival plan . Set to officially be announced on May 28, the plan places a strong emphasis on the US. Up until now, Nissan has relied on steep discounting to keep sales going, but this also cheapens the brand in the long run.

Enter the revival plan. "This is not just a cost-cutting plan," said an anonymous inside source. "We're rationalizing operations, reprioritizing and refocusing our business to plant seeds for the future."

This plan calls for greater cooperation with Nissan's alliance partners, Mitsubishi and Renault, in the areas of plug-in and electric technologies. The plan also involves freeing up resources and investing in technology and new products for core markets where Nissan believes it's strongest: the US, Japan, and China. But what about Europe? Does this mean Nissan is retreating from the continent?

No, but it will reduce its presence and focus mainly on already popular vehicles, the Juke and Qashqai crossovers. Other markets like India, Malaysia, South Africa, Brazil, and Mexico will also receive smaller and more targeted lineups. The Patrol SUV should be safe because it's still a popular seller in those countries.

However, Nissan might be closing more assembly plants on top of the 14 it previously announced. Nissan's new approach is to focus less on quantity of sales and instead place more emphasis on the quality of sales. One key way it'll do this is by reducing sales to rental and fleet operators.

Full plan details will be revealed in the coming weeks and it seems Nissan officials know exactly what needs to be done to survive, though some sacrifices will undoubtedly be necessary.