Nissan's CEO Ghosn To Give Up Asian Management Responsibility to Run Nissan North America
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TOKYO, March 23, 2004; Reuters reported that Nissan Motor Co said chief executive Carlos Ghosn will directly oversee its North American operations as part of preparations for its new three-year plan.
"The United States has had fairly good success for the past few years and the challenge there is to add momentum, which Ghosn is the best person to handle," said Nissan spokesman Gerry Spahn.
Owned 44 percent by France's Renault, Nissan, like most Japanese auto makers, gets the bulk of its earnings in U.S. market. It is in the midst of an aggressive product offensive there.
While remaining chief executive and based in Japan, Ghosn will hand over his current responsibilities for operations in Japan and China as part of the management reshuffle.
Executive Vice President Norio Matsumura, who currently oversees North America, will take over Nissan's Japan operations and Senior Vice President Toshiyuki Shiga will assume full management control over China operations.
Nissan's Japan operations have made strides in improving profitability but most of the gains have been through cutting costs, and it needs to make more improvements on distribution.
"In Japan, Matsumura who has global sales experience in the United States and Europe, has the ability to work hands-on with the dealers," said Spahn.
Having eliminated all of its automotive debt and secured an operating margin comfortably above an eight percent target, Nissan's only remaining task under its current business plan is to boost global sales by about 40 percent, or one million units, in the three years to 2005.
It will announce a new three-year business plan on April 26.
Leaping from near-bankruptcy in 1999 to Japan's most profitable auto maker by operating margin, Nissan has become the darling of financial markets, with the charismatic Brazilian-born Ghosn the toast of the global car industry.
Ghosn, who was sent from Renault, is due to become Renault's chief executive officer in April 2005, while still keeping his current post at Nissan.
Nissan has raised its sales target in the U.S. by 2.1 percent to 870,000 units for the business year to March 31, reflecting a better-than-expected performance in the world's biggest car market.
In contrast, a poor product mix and fierce competition in Japan has prompted the auto maker to cut its domestic sales target by 3.5 percent to 837,000 cars.
Carlos Ghosn
CEONissan
Carlos Ghosn, the ambassador of change, the icebreaker, le cost killer, the troubleshooter, or however you wish to refer to him, is Japan's hero that has provided a glimmer of hope to leaders of thousands of ailing corporations who are desperately seeking solutions to their problems. Ghosn boldly entered Japan's business arena with a passion and determination that had not been seen by the Japanese since Akio Morita and Sony took the US consumer electronics market by storm. Since arriving in Japan in 1999, Ghosn took Nissan from the brink of bankruptcy to a profit making entity in just two years.
Empowering his employees, enforcing accountability and measuring performance are just a few of the ways that Ghosn leveled the playing field at Nissan. According to Ghosn, "You have to explain why you need to change, how you are going to change, and what is the expected result. If you can explain, then people will give you their full support". He describes motivation of people and environment as key elements in the success of any organization. "Your employees must be interested in what is going on in the company. Nothing is more inefficient than a boring company. You have to create an interesting environment where people are interested in the story you are creating and want to hear the happy ending".
According to Ghosn, success does not come easy. "If you have a problem, people should not sleep at night until the problem is solved. If there is something wrong, they need to feel accountable and responsible."
Ghosn believes that one of Japan's most valuable assets is its human resources. "It is not by chance that this small country that was devastated by the second world war and has no natural resources became the second largest economy in the world. Japan's past success is largely due to Japan's most valuable asset - its human resources. They are the best that an industry or business can hope for.They are loyal, dedicated, disciplined people and they are the greatest asset Japan has." Ghosn has brought a unique perspective to Japan in regards to managing these resources. "Fairness is important.You should be fair to performance, not people. Being fair to people independent to contribution is not motivating. Why would an employee want to take a risk and put forth additional effort if they are going to be treated exactly like others who were unwilling to take that risk or put forth the extra effort?"
All indications show that there is a growing number of business leaders that concur with Ghosn's policy of not judging or rewarding employees based on the University that they graduated from, their age, or their gender, but rather on their performance and contribution to the organization. This new attitude is starting to catch on in Japan and the dream of equal opportunity employment is closer to a reality than ever before. However, many feel that Japan is still wasting its most valuable resources. While young men in their twenties on a large scale are unsure of their goals, and in which direction they should put their energies, young women seem to be energetic and enthusiastic about finding their niche in society. Unfortunately in far too many situations, these young women share a similar problem with young men in that they are having difficulty in focusing their energies in a direction that may help them to become more influential in the workplace and the result is that the youth of today are not having as positive an impact on the corporations they work for as one would hope. A number of American business analysts who have studied the human resource situation in Japan believe that females in their late twenties to their early forties are the most efficient employees and a look at the foreign-capital companies' staffing practices here in Japan would suggest that they subscribe to this theory. However, to date few traditional Japanese companies have realized the benefit of providing career opportunities to these enthusiastic and experienced women.
TNL's Senior Editor Dr. Anthony Al-Jamie sat down with Carlos Ghosn and many of Japan's most prominent male and female business leaders to discuss what Japan needs to do to improve on the use of its most valuable resource.
TNL:Mr. Ghosn, what do you think about young Japanese women in the workplace?Many people believe there is a glass ceiling - an invisible barrier preventing women from moving up the Japanese corporate ladder.
CG:It is difficult to disagree with this. If you look at the number of women in management positions in companies including Nissan it is so small that you cannot say that you have fair treatment.To say so would not be true.On top of it being frustrating for women, I think it is a waste for companies because there is a lot of waste of talent and a lot of potential that we will never be able to deliver if better opportunities are not given but the way to move from the present situation to a much better situation is through processes by which you hire, you train, you coach, you nominate people - not in function of their gender or in function of their citizenship but in function of their true contribution and if you limit yourself only to the true contribution of people, I am sure that there will be many more women in the corporate ranks and in particular in management positions.I think you will see a revolution here in Japan.I am ready to bet that in 10 years from now we are going to see many more women in management ranks than you have today."
