Saving the Business Without Losing the Company
Carlos Ghosn
How do you transform a company without destroying its identity? As the turnaround at Nissan shows, you have to respect the dignity of your people even as you challenge them to overturn deep-seated traditions.
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Harvard Business Review
It was in March of 1999 that I got the call from Louis Schweitzer, CEO of Renault, asking me if I would be willing to go to Tokyo to lead a turnaround at Nissan, the struggling Japanese motor giant. The two companies had just agreed to a major strategic alliance in which Renault would assume $5.4 billion of Nissan’s debt in return for a 36.6% equity stake in the Japanese company. The combined company would be the world’s fourth largest carmaker. On paper, the deal made sense for both sides: Nissan’s strength in North America filled an important gap for Renault, while Renault’s cash reduced Nissan’s mountain of debt. The capabilities of the two companies were also complementary: Renault was known for innovative design and Nissan for the quality of its engineering.