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 > summer special 2000
For the year 2000

The Best Government Reformer
How Asia Is Governed
The Best Local Administrator
The Best Activist

The Best Dealmaker
The Best IPO
The Best Stock
The Best Advocate of Shareholder Rights
The Best Fund Manager
The Best Cost Cutter

The Best Airport
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The Best Hotel Gym
The Best Store
The Best Food

In Tune with Nature
The Best Forest Preserve
The Best City Park
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The Best Green Test
The Best Marine Preserve
The Best Marine Park

The Hottest Video Game
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Dealmaker | IPO | Stock | Advocate of Shareholder Rights | Fund Manager | Cost Cutter
The Best Cost Cutter
Ghosn has promised to resign unless he turns Nissan around in one year

Nissan president and chief operating officer Carlos Ghosn objects to the nickname given him by the French press when he was at Renault: "le cost killer." Though he has now been assigned to apply the same bottom-line attention to Nissan Motor, of which Renault owns 37%, as he did at the parent company, he thinks the sobriquet emphasizes only a part of his management style. He insists he pays as much attention to spending when necessary to take advantage of market opportunities as he does to watching the bottom line.

Yet he can't get away from his well-known nickname — at least not at Nissan. Ghosn (rhymes with loan) is charged with turning around a company that lost money and market share most of the last decade. The Renault executive, who arrived in Japan in April, has pledged to reduce operating costs at Japan's No. 2 automaker by $9.1 billion and hack the company's $12.7 billion debt in half by 2003. He is so committed to cuts, in fact, that he has pledged to resign, along with the entire executive committee of the company, if Nissan isn't in the black within one year.

He'll quit — provided he isn't run out of Tokyo first. Ghosn is taking on some powerful interests in Japan as he goes about trying to fulfil his promise. He is substantially reducing the influence of the Nissan keiretsu, the corporate family of suppliers and customers that is built around cross-ownerships and long-standing loyalties with the company. At Nissan's annual meeting in June, he faced down Japanese yakuza, gangsters who threaten to disrupt the once-a-year gatherings between companies and shareholders unless they receive bribes. And his relationship with organized labor may have a few rough spots ahead. Japanese unions, more than most in the world, are willing to accept some layoffs to protect jobs. And Ghosn promises his plan to cut 21,000 Nissan jobs worldwide by March 2003 — 16,500 in Japan — will be accomplished mostly through attrition and sales of Nissan units. But only time will tell whether he is able to keep his promise and whether the unions acquiesce. After all, less radical agendas have scared off more than one executive in Asia, sending them in search of ways to improve the bottom line other than cutting costs. And it is why Ghosn is our choice for the Best Corporate Cost Cutter in Asia over the past year.

He has been through it all before. Born in Brazil and educated in France, the multilingual Ghosn first honed his cost-slashing teeth as head of tire-maker Michelin's Brazil operations. After successfully turning that business around, he was assigned to a U.S. plant where he merged the French-owned Michelin with an American company, Uniroyal Goodrich. He was hired by Renault in 1996 to take charge of the company's cost-cutting program and succeeded in turning losses into gains after only a year.

Ghosn, known for a driven, unsentimental style, has shown a remarkably diplomatic side at Nissan. Upon his arrival in Tokyo, he dispensed with impersonal executive meetings and chose instead to meet face-to-face with hundreds of managers, sales staff and technicians to get a frontlines perspective. "The most important thing is to listen to people and figure out what is motivating them," he says. It also helps that Ghosn is foregoing the slash-and-burn layoffs favored by many American managers.

Especially popular with Nissan's more youthful employees is Ghosn's hands-on management style. Gone is the traditional distance between top-level executives and staff at a typical Japanese company. He has also shown flexibility. While he was known to emphasize teamwork in France, he feels such an approach is unnecessary in Japan. Instead, he likes to talk about the importance of individuality, which he figures has been undervalued in Japan.

Within the strategic plan Ghosn has set out for Nissan are a string of initiatives that will actually cost money. For instance, he sees an opportunity to increase U.S. sales quickly, partly by spending $1 billion on new plants in America. At the June shareholders meeting, he stated: "It will not take long before I can show visible signs of improvement in business."

Like a world-class athlete confident of success, Ghosn has firmly established his goal for all the world to see and judge. Now his success, or failure, will be equally obvious.

— By Murakami Mutsuko

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