Carlos Ghosn – The Rise Of A Titan Of Automobile Industry

Car makers like Nissan and Renault are now known to many and their automobiles are used all over the world.  Nissan, in particular, has a reputation for quality engineering, which reflects on its Japanese roots. However, there is one person who is behind the success of Nissan and Renault and that is Carlos Ghosn.  He was instrumental in turning around the fortunes and reviving these failing companies and turned them into some of the world’s largest car makers. The journey of Carlos Ghosn is truly inspiring and will be spoken about at many business schools worldwide.

Early life and beginning

Carlos Ghosn was born in Porto Velho, Brazil.  After falling sick and being unable to recover, his mother moved with him and his sister to Beirut, Lebanon, to stay with Carlos Ghosn’s grandmother.  Carlos Ghosn did his schooling in Lebanon and obtained his graduation from France’s top schools, École Polytechnique and École des Mines de Paris.

Following his graduation, he began working at Michelin, Europe’s top tyre manufacturer.  He spent eighteen years there. He then went on to be appointed head of research and development for the industrial tyre development division in 1984.  Following this, Ghosn was appointed chief operating officer (COO) for the South American operations and reported directly to François Michelin.

Ghosn completely turned around the South American operations during the time of Brazil’s hyperinflation by employing cross functional management teams to determine best practices.  His performance in South America led to him being later appointed COO for the North American operations.

Renault

Having heard about Carlos Ghosn’s success story at Michelin, Renault, a French automobile maker, invited him to work with them.  Renault was undergoing a severe recession in sales and Carlos Ghosn was roped in as Executive Vice President, in charge of purchasing, advanced research, engineering and development, manufacturing and power train operations.  He reported directly to Louis Schweitzer, the Chief Executive Officer of Renault at the time. Carlos Ghosn was able to replicate the success he had with Michelin at Renault as well. 

The Renault-Nissan alliance

In 1999, the automobile industry was set to see the biggest turnaround with the Renault-Nissan alliance.  It was dubbed by many as a failure due to the friction in the drastic difference in working and corporate cultures between Japan and France.  Renault purchased a 36.8 % stake in the nearly bankrupt Nissan and Carlos Ghosn was appointed COO of Nissan while maintaining the same role at Renault.  He turned around the fortunes of both companies with a revival plan which included drastic cost cutting measures, downsizing and investing in design. This move earned him the moniker ‘Le Cost Killer.’  He announced a three year plan, wherein he would put Nissan at the top of the industry and bring back profits, failing which he would resign.  He went on to successfully achieve all the targets he set. He went on to become the CEO of both Renault and Nissan and became the first person in the world to run two Fortune 500 companies simultaneously.

While the automobile industry celebrity went on to achieve many milestones in his illustrious career, he courted multiple brushes with the law, leading to him being incarcerated and his image being tarnished.  He was stripped of his titles and responsibilities, owing to huge financial frauds wherein he under reported his income earnings from Nissan to the Japanese authorities and a coup which involved whistleblowers who were his close aides.  The fall from grace has been heavily reported all over the world, but it does not change the fact that Carlos Ghosn is a true visionary and leader.

Read about how Carlos Ghosn turned from a CEO to an international fugitive here: Carlos Ghosn : From Automobile Industry Celebrity To International Fugitive