(Bloomberg Businessweek) -- Carlos Ghosn enters the building in the executive style, which is to say, through the roof.
The helicopter has traced an imprecise line above the Chao Phraya River, buzzing over Bangkok’s ancient temples and clotted highways before zeroing in on the Peninsula Bangkok hotel, where the bright green helipad seems to swim in the wavy heat. He hops out and is led down to the Paribatra Lounge, a 37th-floor oasis reserved exclusively for aerial check-ins. The décor is retro aeronautique, and the welcome drinks are cold, but to linger here would be to stray from the itinerary, so Ghosn (rhymes with “bone”) moves on. He’s whisked down to his room, where he’ll grab a quick lunch and slip on a fresh suit and tie. Then he’ll wend his way to a ground-floor conference room and the first item on the afternoon’s agenda: a Q&A session with several hundred Thai business school graduates.
The itinerary that shapes his day is densely plotted and color-coded, and if Ghosn seems a little too beholden to its demands, consider the alternative: cascading disorder. If he were to run a few minutes late on any of the agenda items mapped out on this afternoon’s sheet, the entire scaffolding of the day might collapse, causing the week to buckle, ultimately threatening the month. As chairman and chief executive officer of a global alliance of auto companies—including Groupe Renault, Nissan Motor Co., and Mitsubishi Motors Corp., all three of which he also leads as chairman or chairman/CEO—his travel schedule begins to fill up six months to a year in advance. A typical month for him consists of a week in France, a week in Japan, and the remaining two weeks split among the U.S., Morocco, Russia, India, or any of the other countries where his companies have factories or executive offices. It’s tempting to imagine a future in which Ghosn’s itinerary is considered a valuable artifact: a window into what globalization was really like in 2017, when it was spreading further than ever and, at the same time, getting slammed by waves of populist discontent.
Ghosn, 63, was born in Brazil, raised in Lebanon, and educated in France. He proudly calls himself a citizen of the world. But in the era of Brexit and Donald Trump, it can seem a stubborn pride, willfully anachronistic. “If you believe you are a citizen of the world, you are a citizen of nowhere,” Theresa May, Britain’s prime minister, said last year. It was one of countless political uppercuts thrown at “Davos Man,” the not-so-endearing label for those transborder, postnational elites who annually migrate to the World Economic Forum in Switzerland. Ghosn represents the species in its purest form. In the Wikipedia entry for the summit, his photo appears near the top, right beneath a photo of the conference founder. He insists he doesn’t take any of the backlash personally, but it’s hard to believe that some of it isn’t meant that way.
If the politics of the past year have left any sort of mark on him, it’s imperceptible as he strides onto the stage for the Q&A. These are his people—students of business, not politics—and most of the questions they lob his way are as familiar as old friends: What drives you to take over struggling companies, and how do you always seem to turn them around? How were you able to become the first foreigner to run a major Japanese company? What’s your secret for winning the trust and loyalty of employees throughout so many diverse cultures?
“I keep my eyes on the scorecard,” Ghosn tells them. Production, profit, growth—the bottom line. Diversions constantly arise, but he’s learned to manage the distractions, which he says assume different forms in different parts of the world. “In Japan,” he says, “people have a tendency to preserve other people. But if you start to look at people, and not your scorecard, you’re going to be in trouble. If you start to say, ‘He’s not very good, but, hey, he’s such a good person, and he’s nice, and he’s a stand-up guy,’ then you’re compromising.”
It doesn’t take long for an indirect challenge to rise from the crowd: Can’t a modern executive do more than protect his bottom line? A Thai business consultant asks him to consider the example of driverless cars and the potential they have to ease congestion. Nissan is a leader in the field; it’s already selling its Serena model, with driver assistance, in Japan. But maybe, the man suggests, companies such as Ghosn’s should first introduce them to Bangkok and other underdeveloped cities, where rapid globalization has brought increased mobility but also haphazard urbanization and murderous traffic. Conventional business wisdom says companies should first test them in places with advanced infrastructures, but why shouldn’t Ghosn focus on the places where they’d do the most good? “Change the entire society,” the man urges Ghosn. “Disrupt!”
The unstated implications—that the globalized world needs a radical disruption and that a car executive is in a position to do it—are notions that Ghosn rejects outright. Instead of apologizing, his instinct is to rise up and defend globalization, as well as his role in it.
“At the end of the day, we are a carmaker,” he tells the man. “We should not forget that. We can contribute to a better society, but if you want to make a better society, you should not be a carmaker. You should be something else: a politician.”
Politics. That’s something to work through, he says, and to transcend. A man in his position, Ghosn says, changes the world by creating opportunities through globalization, which he describes as an ultimately benevolent law of nature, and fighting it makes about as much sense as declaring a war on gravity. But as the income gap between executives and workers has widened, and import competition has chipped away at manufacturing jobs in developed countries, globalization’s downsides have become increasingly apparent. Ghosn doesn’t dismiss those effects as make-believe, and he says the backlash might eventually result in corrections that bring about a more human brand of globalization. That said, he’s convinced that none of the criticisms can negate a larger truth: No force in history has done more economic or societal good than the world-encircling flow of goods, money, and culture. Brexit, the election of Trump, and the rise of antitrade populism are all very small bumps on a very long road.
Davos Man plans to outlast them all.
The web is littered with separated-at-birth memes comparing Ghosn to Mr. Bean, the hapless Everyman played by British comic Rowan Atkinson. There’s a vague facial resemblance, but it’s hard to think of a less accurate comparison once you see Ghosn in person. There’s nothing hapless or slapstick about him; in fact, it’s his physical confidence, the sense that he could be thrust into almost any situation and avoid looking foolish, that comes across. Ghosn looks the same when he quizzes spot welders in a factory as when he talks policy with Vladimir Putin. He’s susceptible to impatience, irritation, and sometimes anger, but he almost never seems intimidated by his surroundings. When you ask Ghosn about his situational ease, he acknowledges it. “If I was a rookie, in my first year as CEO, I would not behave the same way I do after 16 or 17 years,” he says. He quickly finds an example: “When I met Prime Minister May, I had the impression ‘I know this office by heart.’ Because I was there before to see David Cameron, Gordon Brown—there are five prime ministers in the U.K. I met in the same office. So somehow, when you come back after the third, fourth time, I don’t think you are in a situation where you feel, you know …”
“Awkward,” it seems, isn’t in his vocabulary. And when you look back on the arc of his life, it can appear as if he was predestined to be a culturally agile globalist. Ghosn’s family was from Lebanon, but his grandfather, at just 13, hopped on a boat, endured three months at sea, and made his way to Rio de Janeiro. Speaking only Arabic, he wandered deep into the Amazon basin, where he picked up Portuguese and hacked out a life for himself in the Guaporé Valley, a largely unsettled region full of spider monkeys and uncontacted tribes. Eventually he settled in Porto Velho, at the time a splintery jungle outpost where pink dolphins jumped in the river and rubber-tappers swilled cachaça. He established a pioneering air travel service, and years later, Ghosn’s father, Jorge, took it over. When it was time for Jorge to marry, he traveled to Lebanon to bring back a bride: a Nigerian-born Lebanese girl who was a self-described Francophile. She gave birth to Carlos in Porto Velho in 1954. At age 2 he drank some dirty river water, got sick, and on doctors’ orders moved with his mother and sister back to Lebanon. He grew up in Beirut, then the most cosmopolitan city in the Middle East, and at 17 moved to Paris to study engineering.
Somewhere along the line, a foundational philosophy emerged: Identity is additive, not substitutive. If a person is born Brazilian and later absorbs the French culture, he says, it contributes something to his identity; it doesn’t make him less Brazilian. As Ghosn worked his way up through global companies—first at Michelin, then Renault, and finally leading the Renault-Nissan Alliance—he applied this personal philosophy to the corporate world.
Last year, Mitsubishi Motors was in free fall. Caught falsifying the mileage estimates for several of its vehicles, the company was forced to offer hundreds of millions of dollars in rebates while its sales tanked. When Mitsubishi CEO Osamu Masuko suggested to Ghosn that his company might join Nissan and Renault, Ghosn jumped at the chance, snapping up a controlling share of Mitsubishi for the alliance.
This is Ghosn’s celebrated specialty: resuscitating companies from near death. He first did it in the mid-1990s at Renault, where he slashed costs, pulled the company back into profitability, and got saddled with a nickname—Le Cost Killer—that annoys him to this day. A couple of years later, when Nissan teetered on the brink of bankruptcy, Ghosn repeated the trick. Among other things, he cut 21,000 jobs, or 1 in 7. His reputation as a pitiless ax man hardened, but Ghosn contended that the purpose of the bloodletting was to allow vitality and growth. Since then, Nissan’s production has more than doubled, and it now employs 4,000 more people than it did before those initial cuts.
In late April, Ghosn paid his first visit as chairman to a Mitsubishi factory, a new one on the weedy edges of Jakarta. His visit was cause for celebration, and truckloads of flowers, ribbons, balloons, and bunting proved it. Inside the main assembly plant, hundreds of chairs, all wrapped in ceremonial white fabric, faced a brightly polished stage. A man with a damp rag wiped the already clean steps that Ghosn would soon grace with the soles of his shoes. In the back of the room, translators in three separate booths (Indonesian, English, Japanese) tested their microphones, making sure the headsets given to the crowd worked. Dozens of portable air conditioners fought a losing battle against the heat.
According to the invitations, the dress code for the factory inauguration was “suit or batik,” the latter being a colorful, aggressively patterned shirt or dress that’s native to Indonesia. Those who’d opted for suits seemed consumed by regret; by the time Ghosn arrived, they were mopping their brows and fanning themselves.
Ghosn wore a batik. Entering the room in lockstep with the president of Indonesia, he was untucked, open-collared, and, by all appearances, perspiration-free. A lot of men—foreigners especially—would have struggled to pull off the batik. U.S. Vice President Mike Pence had flown to Jakarta the week before, and he’d also met with the president—in a suit. Yet here was Ghosn, exchanging salaam aleikums with a tight circle of VVIPs, wearing the batik as if he had a closet full of them back home.
When Mitsubishi was folded into the alliance last year, Ghosn insisted the press conference in Japan be moved from Nissan headquarters to rented space nearby, to avoid the perception that he’d simply swallowed up a wounded competitor. In Indonesia he again tried to assure workers that the Mitsubishi brand wouldn’t be watered down by joining forces with Renault and Nissan. The companies will combine purchasing operations, share basic platforms, and do some cross-brand manufacturing. But Mitsubishi’s core identity—the design elements consumers recognize and the employees who constitute its soul—will remain distinct and intact, he says.
“Maintaining the identity of each brand is very easy. This has never been a worry for me,” Ghosn explains the following day to a group of Mitsubishi managers. “It was one of the most frequent questions I received when we started the alliance. ‘Oh, it’s the same platform, the same technologies, so the Renault car is going to look like a Nissan car.’ Fast-forward 17 years: Renault cars are very different from Nissan.”
The concept couldn’t be clearer to him, but there are plenty of people who fundamentally disagree. The idea that identity—personal, corporate, or national—is existentially threatened by the very globalization he embraces has flowered into a full-fledged political credo, one that has challenged almost everything his life and career are built upon.
“If you want to make a better society, you should not be a carmaker”
Ghosn was in New York when the French presidential election was decided in May. He’s newly remarried. His wife, Carole, is also of Lebanese descent, but for years she’s called New York home. The Friday before the election, the two bounced around art galleries in Chelsea, lingering for tea in the studio of Japanese photographer Hiroshi Sugimoto, making offers for pieces he wasn’t quite ready to sell. For Ghosn, it was a respite, a chance to think about something other than politics. For months, everywhere he’d gone, he’d been besieged by questions about the French vote, which he’d deflected: “We’ll just have to wait and see.”
Even if Marine Le Pen, the candidate of the far-right National Front party, hadn’t tried to turn the election into a referendum against globalization, the vote still would have been vitally important to Ghosn. The French government owns a 19.7 percent stake in Renault. The new president would, in effect, become a business partner of Ghosn’s.
Le Pen was clearly a concern. When she railed against “globalists working toward the dilution of France in a giant global magma,” she was talking about the Carlos Ghosns of the world. At a business forum during the campaign, Ghosn didn’t take sides, but his position was clear. “When people talk about the development of protectionism,” he said, “for carmakers it’s a disaster, because the whole supply chain has been built on open borders.”
Since last year, when those protectionists actually began winning big elections, his approach to them has been more pragmatic than confrontational. After Brexit, Ghosn suggested Nissan might have to shutter its plant in Sunderland, England. A few months later he met privately with May, who convinced him she’d work to protect his company’s interests. The details of her assurances haven’t been publicly disclosed, but days after that meeting, Nissan announced that it planned to build its new Qashqai and X-Trail SUVs in Sunderland.
Then there’s Trump. Nissan builds more cars in Mexico than any other automaker, and about a quarter of the vehicles the company sells in the U.S. are made south of the border. But Ghosn has consistently predicted he’ll be able to find common ground with Trump, whom he hasn’t met. Even though the U.S. market continues to sag overall, he insists Nissan needs more capacity in America anyway. “ ‘America First, jobs in the U.S.’—OK, we’re fine with that,” Ghosn said.
Be that as it may, the morning after Emmanuel Macron coasted to victory, Ghosn was in a particularly expansive mood. “I think everyone is very optimistic,” he said at Nissan’s offices on Lexington Avenue.
Macron is no doubt friendlier to his brand of globalization than Le Pen, but he’s not likely to embrace Ghosn as an unambiguous ally. The two men have history. For the past couple of years, Ghosn has tried to get the French government to release its shares of Renault to allow the alliance to take more control of the company. But in 2015 the French government, led by Macron as economy minister, actually increased its shareholdings to secure more voting rights and to thwart Ghosn’s plans. Macron didn’t tell Ghosn about that power play until hours before it became public. The government suggested the acquisition of the shares was temporary, but it still hasn’t let them go. The obvious friction between Ghosn and Macron intensified last year when the politician labeled Ghosn’s Renault compensation—€7.1 million ($8.2 million)—“excessive” and threatened to introduce legislation to limit executive pay. (Ghosn’s Renault pay is separate from what he earns at other companies; at Nissan, for example, he was paid $10.6 million last year.) Months after Macron made his legislative threat, France changed its laws to make sure shareholders have a say when determining the compensation of CEOs.
Macron’s success didn’t spell the end of European antiglobalization, of course; the public’s distaste for the Davos Man didn’t simply evaporate after Le Pen was humbled. The night of his victory, Macron celebrated at La Rotonde in Montparnasse, a bistro associated with Picasso, Hemingway, Cocteau, Matisse, and other artistic celebrities. Macron caught flak after the party from those who considered it a venue for the beau monde, not for a man of the people.
That kind of outrage doesn’t seem to faze Ghosn, whose own parties beg comparisons to far more flagrant historical parallels. Last fall, to celebrate their marriage, he and Carole rented out the Grand Trianon at Versailles and threw a party inspired by Sofia Coppola’s 2006 film, Marie Antoinette. The palace was filled with costumed actors and actresses with powdered wigs and rouged cheeks. Ghosn isn’t running for office, and if the tone struck anyone as a little too let-them-eat-cake, to him it didn’t symbolize any inherent unfairness in the globalized economy. If globalization is embraced in an upfront and honest way, he says, it’s as fair a system as there is, even if jobs sometimes have to move from one place to another to preserve the long-term, overall momentum of economic growth.
“I can totally understand the frustration of the blue-collar people, saying, ‘What the hell’s going on? How can our government let this happen?’ ” he says. “I can understand that, but this is also the responsibility of the companies to anticipate, prevent, and prepare. Not to all of a sudden say, ‘I’m sorry, there’s a change. I’m going to shut down the plant, and I am going to move outside.’ ”
He’s back to the scorecard again: In his alliance, he says, all plant managers know where they rank in terms of productivity, from No. 1 to No. 60. And if they’ve been given an honest shot to improve yet still languish at the bottom, how can anyone claim it’s unfair if the plant shuts down?
“It’s easy to live with it, as long as you are anticipating,” Ghosn says.
In Thailand, Ghosn takes a seat at the head of a long table and leads a closed-door meeting with about 40 of Nissan’s senior executives from Asia.
“Our total revenue in Southeast Asia?” he asks. “How much is that?”
Someone at the table says 25 billion yen ($223 million), a figure Ghosn knows is wrong. “No, more than that,” he says, impatient for the right number. “Sales. Sales.”
The corrected figure—400 billion yen—doesn’t put him at ease. Nissan has been selling eight models in Thailand and generating a 2 percent operating margin. Mitsubishi, which has been billed as the weaker partner in the alliance, actually performed better by some measures in the region: Its margin was 10 percent. What’s more, Nissan has been spending 20 percent more than Mitsubishi to build pickups in Thailand.
Several times in the meeting, Ghosn punctuates his frustration with a fist on the table. “Frankly, it’s very difficult to explain why we have such a pitiful performance,” he says.
Despite countless such lectures, Nissan fell short of the profit and market-share goals it set in the five-year plan that ended on March 31. With operating profit margins of 6.3 percent and 6.4 percent, respectively, Nissan and Renault edged closer to Toyota’s 7.1 percent. But Mitsubishi, at 2.8 percent, lowers the alliance’s average.
The company certainly isn’t the only carmaker struggling to find the proper balance between profit and growth. General Motors Co. has responded to its own lagging international numbers by reining in its global operations, largely abandoning Europe, and cutting loose investments in India, Russia, and other emerging markets. The assumed benefits of ever-growing economies of scale, GM’s actions suggest, may not be all they’re cracked up to be.
Ghosn is sticking to his guns. At the executive meeting in Thailand, he outlines his plan to turn around Nissan’s regional numbers, emphasizing that the scale and experience Mitsubishi brings to the alliance could be a key to Nissan’s success. Building on that, they could go after Toyota with a new, Renault-inspired electric car that would sell for around $8,000 in China.
During the first five months of 2017, Ghosn’s alliance edged up to No. 3 in the world by boosting sales 9 percent, to 3.8 million cars and trucks worldwide, says Felipe Munoz, a Jato Dynamics analyst in London. That’s 394,000 fewer than industry leader Volkswagen AG and only 38,000 fewer than archrival Toyota. These numbers exclude Russia’s AvtoVaz and China’s Dongfeng Trucks, joint ventures that are also part of the alliance, and they also exclude figures from small Asian, African, and Latin American countries, where sales reports take longer.
“‘America First, jobs in the U.S.’—OK, we’re fine with that”
Ghosn hasn’t forgotten that back in 1999, Bob Lutz, who later became GM’s vice chairman, said Renault would be better off taking the money it paid for Nissan, loading it into a container ship, and sinking it to the bottom of the ocean. But by 2005, Lutz backtracked, admitting that he’d failed to account for Ghosn’s “personality, drive, firm will, and daring.”
“Obviously it’s a huge satisfaction,” Ghosn says, throwing his arms out wide. “This is a collection of the broken arms of the industry, and then all of a sudden these guys are at the top.”
But will Ghosn, the celebrated turnaround artist, stick around if the only direction he can go is down? Earlier this year he relinquished his title as CEO of Nissan, but he remains the company’s chairman and, of course, he’s still the chairman and CEO of the alliance. The title change stirred recurring speculation about his eventual retirement, but people within the alliance insist there’s no rush to find a successor. “To Ghosn and to me,” says Hiroto Saikawa, a 40-year Nissan veteran who replaced him as the company’s CEO, “we have made these achievements so far, and we do want to hand it over to the next generation in a careful way.” Trevor Mann, chief operating officer of Mitsubishi, says whoever takes over next will likely follow Ghosn’s lead, mirroring the values he’s established in the alliance. But he quickly adds, “I don’t think Ghosn is planning to go.”
Ghosn seems more amused than preoccupied by questions of succession. He’s said he works about 65 hours each week, and that figure might jump another 12 hours or so if you count the time he spends in his corporate jet. He says he can’t really picture himself idling in retirement. That’s why he predicts he might be a boardroom fixture as long as Ferdinand Piëch, who was chairman of Volkswagen until after his 78th birthday. “I am not just shutting the door and going fishing or something,” Ghosn says.
When asked to identify a hobby, he picks reading—specifically, reading about the Roman Empire. “I’m passionate about it,” he says. That period is relevant to life in the 21st century, he says, and provides instructive examples for, say, a modern business executive. He doesn’t go as far as to cast himself as a modern-day Julius Caesar, but when he pictures the future of his alliance, he talks about a business empire built on a foundation of inclusion, able to sustain its power through expansion, adding more and more companies to the fold, harnessing the world’s natural tendency toward consolidation and growth.
“Look at history,” he says, “all the big empires of the world. Take the Roman Empire, take the Greeks, the Ottoman Empire.”
All of them came to an end, but they all shared another common thread that’s more interesting to him at the moment: The inevitable pull of globalization was the force that gave them power, and they rode it for as long as they could. He’ll do the same for the alliance, he suggests.
“As long as it is necessary,” he says. “As long as it is necessary.” —With Masatsugu Horie, Katya Kazakina, and Jenn Zhao
To contact the authors of this story: Monte Reel in Chicago at mreel2@bloomberg.net, Kae Inoue in Tokyo at kinoue@bloomberg.net, John Lippert in Chicago at jlippert@bloomberg.net, Jie Ma in Tokyo at jma124@bloomberg.net, Ania Nussbaum in Paris at anussbaum5@bloomberg.net.
To contact the editor responsible for this story: Miranda Purves at mpurves5@bloomberg.net, Daniel Ferrara
©2017 Bloomberg L.P.
