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Essay on New CEO changes Nissan
In 1998 Nissan was on the ropes. The company was hemorrhaging cash and it continued to suffer from lackluster products that ensured a falling market share. With Nissan heading toward bankruptcy, its president mounted a worldwide campaign to snare a rich partner to help Nissan through its financial mess.
Since the American experience in Japan had been lackluster at best and financially painful at worst, there was no excitement in Detroit over a bailout effort that would be both expensive and distracting. The unlikely rescuer was Renault and its former tire company executive, Carlos Ghosn.
Under Ghosn's leadership Nissan went from losing billions to making billions within three years. The company is now on a roll launching new eye-catching models, increasing its capacity in the United States and restoring its once debt-ridden balance sheet. (Magee, 2003)
The miraculous Nissan turnaround has made Ghosn a corporate icon in Japan. The speed of the turnaround compared to the General Motors and Ford decade long odyssey of trying to revive Saab and Jaguar, respectively, or Chrysler's plunge into the red after bringing a dowry of $7 billion to Daimler at the time of the 'merger" has left auto executives around the world asking how he did it. In reality, Nissan had assets that most ailing auto companies lack but Renault's strategy also has a message in it.
For starters, Renault sent in the 'A team" to fix the mess. They carried the clout to get the job done and they didn't have to clear every move with the home office because they were the home office. They went without knowing much of Japanese business culture but they knew what had to be done to stop the cash drain. After a face-saving few months, the top Japanese management was kicked out, an essential part of any turnaround since the guys who made the mess....
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