Renault-Nissan's Ghosn on possible GM alliance

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Renault-Nissan's Ghosn on possible GM alliance

Renault-Nissan's Ghosn on possible GM alliance
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Will he or won’t he? That’s the question the motor industry is asking about Carlos Ghosn, the head of Renault-Nissan, who some shareholders at the world’s biggest carmaker General Motors, believe can work miracles and stem the losses at the ailing US company. Ghosn is a superstar of the industry since he saved Japan’s Nissan from almost certain bankruptcy and talks are now underway between executives from Renault, Nissan and GM about an alliance.

At the Paris Motor Show, EuroNews asked him about the prospects for such an alliance:

Carlos Ghosn: By mid October we must answer one very simple question: is there enough common ground to make such an alliance possible, or not? If not, then we will drop the project. There’s no point wasting any time looking into something which isn’t going to happen and which has no objective basis. If, on the other hand, we establish there is enough common ground, we can move on to the next phase and look at how we can make it happen: what kind of organisation would it be, what would the process be, and how can each manufacturer benefit the most. That’s what’s happening. So of course there will always be much speculation: so-and-so will be thinking this, another person will be thinking that, so-and-so is enthusiastic, somebody else isn’t !! Frankly that’s not very important, because the bottom line is that we run a business and we’ll take an objective look at what such an alliance can bring to our company and we’ll consider it on its merits.

EuroNews: You launched a strategic growth plan called ‘Renault Commitment 2009’, which includes selling 800,000 more vehicles each year by 2009. What’s needed for that plan to succeed?

Ghosn: You know, the only thing which counts for me as boss of Renault is the commitments I’ve made, particularly to our workers, on the three objectives that we must reach in 2009: a six per cent profit margin, eight hundred thousand more cars sold annually and the Laguna in the top three for quality. That’s all that matters. So, if we ever do go ahead with an alliance, it has to be one that strengthens our goals. No way will I accept an alliance which weakens our potential to meet those commitments. We pledged just those three things, they are very important and we must stick to them. So, I can assure you that a potential alliance with General Motors will be examined based on whether it reinforces and consolidates the commitments Renault has made.

EuroNews : The Renault group has lost market share in Europe since the start of the year, what’s your assessment of this year’s performance?

Ghosn: It has been a difficult year for us: why? First, because it’s not a very favourable environment, the European market is stable, it is a market where the cost of raw materials and energy has gone up, at the same time we’ve launched very few new models. And we’ve been concentrating our efforts on preparing the twenty six new models which are part of our ‘Renault Commitment 2009’ plan, and on reducing costs and improving quality, so 2006 has been a difficult year, we had expected that because there’s been a lot of effort, a lot of work and not much in the way of results. But it is an investment which will result in 2007, 2008 and 2009 being much better.

EuroNews: What could you do to improve the existing Renault-Nissan alliance?

Ghosn: I don’t think there’s much missing, what we need to do is just continue working as a team within the two companies, and we must never stop looking for further synergies, they can always be found. We must continue working together. I think that the spirit of co-operation has grown since the merger. I am particularly impressed by the fact that it’s the only alliance where people spend more time working together than fighting.

EuroNews: What do you think European or US manufacturers can learn from Japanese or South Korean carmakers?

Ghosn: I think Asian companies can contribute a lot to European and US manufacturers and European and US companies can contribute just as much to their Asian counterparts. You can put companies together, without losing their national identities. It is not a question of creating a hybrid which isn’t either Japanese nor French any more. The Japanese are in their place and the French are in theirs, each with a strong sense of identity. But they’re able to work together, with different methods, different viewpoints, different priorities and a different approach: it is difficult, but it is extremely rewarding and in general you get much better results.

EuroNews: What do think about the current efforts of India and China to build competitive, national car industries?

Ghosn: In some sectors, such as the car industry, the level of competition makes it very difficult to see how a national champion could emerge. The reason is, these days, all the world’s carmakers are located in China, and I don’t see why an international manufacturer based in China couldn’t do the same as a Chinese manufacturer also located there. It is same labour force, the same infrastructure, you hire the same executives and have the same resources. Therefore, I see no reason why developing countries shouldn’t play an increasingly important role as globalisation grows, though I realise that won’t be easy.

EuroNews: Some call you “Mr 7-Eleven” after the convenience stores that are always open, where do you get your energy?

Ghosn: “It is a good question, which I don’t have an answer to.