Essay

Carlos Ghosn and Nissan

At any given time companies face various risks when economical sabotage especially financial crises befall them. During the financial crisis that is still biting many established and growing economies, companies went underground as many others laid off employees and some struggled with difficult to be afloat. One of these companies that has struggled and yet it has succeeded is the automobile manufacturing/ assembling company, Nissan. This paper evaluates the bold measures and or steps that were undertaken by Carlos Ghosn to evade the financial crisis at the time Nissan was in the verge of collapsing.

Carlos Ghosn and Nissan

Many companies that were totally grounded had a chain of burdens right from heavier debts to great losses. Nissan had experienced the same and many other factors like Poor and damaged brand, thus towards the end of 1990s Nissan had almost reached the brink of collapse, however this was the right time Carlos Ghosn came in to salvage the sinking Nissan. With his educational and a multicultural background equipped with fluency of five languages practically made him to understand different needs of customers across continents. As much as Ghosn was optimistic, he had given Nissan a 50-50 chance of survival. He took bold steps which a few managers may have had the guts to take. During these desperate times of Nissan, Ghosn decided to undertaken stringent but desperate and focused steps to realize the survival of this company.

First and foremost, Ghosn was set to change the trend of operations regardless of the criticism and politics of denial that were generated from within the company. This was manifested in many ventures he dared advance; for instance, he set up teams to investigate and determine the depth of the crisis before making any decision and undertaking any of the steps to salvage the company. Simply the teams were under strict instructions to set up tough but realistic objectives or goals to achieve. Thus Ghosn himself stated that, “If you disagree with any plans, you have got to leave the company”. This tough stance could easily resulted into hatred from within, but Ghosn was focused. Many managers who have failed to accomplish goals do not believe in such a step taken by Ghosn, thus investigating first and not only taking office and starting from where everything was left. Carlos Ghosn being an intellectual took this as step number one. This step opened doors to other malpractices and gave him light on what to change and what to put an end to in order to rescue this failing gigantic automobile assembling company.

The other step which required boldness was cost cutting and this for any knowledgeable manager, it generated a chain of other events which are obviously adverse to any economy. He cut costs through many ways in his disposal and depended on the research and or investigations that were previously conducted by the teams he had set up. One of the ways of cutting costs he undertook was closing some assembling plants. He closed down five of them which resulted into massive layoffs of employees. More than twenty thousand employees were sent packing through attrition. However, this was necessary for the reason that not many employees could have agreed to remain in the company with lowered or reduced salaries. Many of the staffs laid off were of wage earning class and many of the departments or sections that were not performing. Another way of recovering Nissan into her feet was by cutting purchasing costs which resulted into massive protests by suppliers of Nissan. A few suppliers were contracted by Nissan under the instruction of Ghosn but based on recommendations of the teams that had been previous set.

After doing all these, thus closing down some assembling plants, laying off employees and in general cutting costs, Ghosn started or embarked on assembling state-of-the-art brands of cars. He wanted to find a selling and promising brand after all. For instance, after doing the magic of cost saving and reduction of debt, Ghosn revived Sports Utility Vehicles (SUVs) like the Z-series which had been put to an end in the mid 1990s. “Nissan leaped into new Markets with the Murano SUV and the Quest Minibus, also profits were realized from new brands such as Titan Truck and Armada SUV”. Carlos Ghosn had the magic of revitalizing Nissan to her feet. In combination of other skills, he had earned substantial experience from Michelin which put him ahead of challenges. He had the marketing skills of any successful CEO of which his rich multicultural background made an impact by penetrating some markets that are unimaginable. “Today, Nissan is back on track under the leadership of Ghosn as the CEO. It is turning out great cars and achieving the highest profits margins in the business even ahead of Toyota Motors”. However, the foreign exchange has not impacted negatively on Nissan adventures.

Conclusion

Modern managers and CEOs have an excuse to imitate this business guru who has turned round a dying company to its feet and its offering and promising tough competition against her competitors. Ghosn has massively utilized modern technology like the internet to reach out for a broader market and thanks to his bold steps and higher and fearless risking abilities.