Into The Future With Nostra Carlos

Cammy Corrigan
by Cammy Corrigan
into the future with nostra carlos

Within the Renault-Nissan alliance, Carlos Ghosn must have felt like he was the king. He and Louis Schweitzer were the architects of the fourth largest car making entity in the world. Then the Board of Directors chopped his legs out by vetoing his deal with Roger Penske to supply Saturn with Renault cars and, suddenly, Carlos Ghosn had a very sharp lesson. In the Renault-Nissan alliance, no-one is too big to fail. So when it came to his re-election as CEO, no-one thought it was a cut and dried affair. Well, on Thursday the 29/04/2010, Mr Ghosn received his second term at Renault. And he set out some targets to show the BoD he means business.

Reuters reports that over his next 4 year term, Ghosn envisions the following:

1. The target for 2010 is positive free cash flow. This target shouldn’t be too difficult as Renault owns a hefty 21.8% stake in Volvo trucks. If Ghosn can keep his cool and sell the stake at the right time (the heavy duty truck market is picking up speed after a near death experience) then, the sale should wipe out nearly all of Renault’s debts, enabling more money to flow into Renault.

2. Ghosn cannot see Greece’s problems threatening recovery. This is quite a dangerous prediction as France (which Renault still relies on for a lot of their business) is on the hook for many billions of Euros to Greece. A bailout has been orchestrated with French and German money, two key markets for Renault. However, if Greece can’t sell cuts to public spending to the Greeks (and it’s looking unlikely, given the rioting happening), then the bailout could either be withdrawn, or France and Germany will have to sink more money into Greece. Either outcome will almost certainly affect global markets.

3. Ghosn is to launch a new plan by year-end. Personally, this sounds like jobs will be cut. Lest we forget, Europe has a serious overcapacity problem. And with Opel hanging on for dear life, something has to give. By year-end, Ghosn and the rest of Europe will know whether Opel’s capacity is still sloshing around, or not.

Ghosn has some serious challenges in front of him. And if he doesn’t deliver, the BoD have shown that they will cut him down to size.

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3 of 9 comments
  • Robert.Walter Robert.Walter on May 05, 2010

    Cammy, don't forget that the discussions centering on Penske buying cars from Samsung with a Saturn badge on the hood were hyped by many parties, least of which IIRC was Renault. The upside to Renault in the deal was to cover Samsung overhead, but the downside was to create a new competitor to Nissan in NAFTA. To me, it was always to be expected that this deal would die. And the "BoD killed-it" was both a reason and cover (for Goshn), much like the salesman blames the manager for all the extra charges in a dealer transaction. Goshn is a pragmatic and realistic operator, if there is nothing there to further his mission at reasonable cost/risk, he's going to be the first one to let it die (think the GM alliance deal.) Is Goshn in trouble? Start with the question of "how replaceable is he", and end it with "how willing is Renault to risk the CEO churning that occurred at Peugeot a few years ago?".

  • John Horner John Horner on May 05, 2010

    If Renault-Nissan-Samsung wants to sell Korean built vehicles in the US, they should simply market them through the Nissan network. There was very little justification for adding the Saturn brand to the mix.

    • Lucianrosca Lucianrosca on May 05, 2010

      That would make sense as long as the Samsung vehicles are at Hyundai quality. If they are at Daewoo quality you can be sure Nissan doesn't want to stain their brand image with such vehicles. Suzuki is a good example of that.

  • Lou_BC this link shows number of units waiting to be sold: are 7630 Renegades rusting on dealer lots. 7 of the 9 on the list are Stellantis products. The Chevy 4500 chassis cab high inventory reflects what I see in my world. Ford and Ram have the chassis cab market well in hand.
  • MaintenanceCosts We need a system to get unsafe hoopties off the road. But the existing state inspection systems relying on corruptible private garages ain't it. It needs to be federally overseen, consistent, and cheap.
  • Paul Like an electric Duesenberg SJ, a vehicle not fit for the economic times it was born into. When the general public is upside down and 30 days late on an 84-month loan at 22.9% on their Kia Rio, this doesn't seem to be the answer to a question most people are asking.
  • Drnoose Since they are going to still hit you with the fee anyway, it will not make that big of a difference.
  • Steven in Queens I've driven both the Renegade and Compass in rental/fleet situations and they seemed really close in size and they're similarly priced as well. I thought both felt cheap and unimpressive. Must be tough for dealers to offload one over the other unless a customer really has an appearance preference.