Carlos Ghosn is stepping down as Nissan's CEO — but he will still be running the show
The Renault-Nissan Alliance announced on Wednesday that Carlos Ghosn would step down as CEO of Nissan, but remain as Chairman of the automaker and CEO and alliance itself. Co-CEO Hiroto Saikawa, a Nissan veteran, will take over.
The bottom line is that Ghosn, one of the most successful and globally well-known leaders in the auto industry, will still be running the show, but just not the entire show on a day-to-day basis.
On its face, the current Renault-Nissan Alliance, which now also includes Mitsubishi, is an impractical mashup of automakers residing below the biggest players in the auto industry: Toyota, Volkswagen, and General Motors. However, the combination has been successful and has made Ghosn into a celebrity, although his star has faded somewhat, after burning very brightly after the financial crisis.
Ghosn is backing away from Nissan for the simple reason that the Mitsubishi challenge is considerable. In 2016, the alliance bought about a third of Mitsubishi, a venerable Japanese carmaker that's lately been roiled by a fuel-economy scandal and that lives in the shadows on Toyota, Honda, and Nissan.
Mitsubishi's position in the US market is downright pathetic: it's keeping off life support by selling effectively one vehicle in meaningful numbers, the Outlander crossover. Market share is negligible, and Mitsubishi is routinely nominated as a hopeless player that should follow Suzuki and leave the hyper-competitive US market.
A model of the globalized, Pre-Trump CEO
With the Renault-Nissan buy-in, however, Mitsubishi has been extended a lifeline, in the form of access to the Alliance's engineering platforms and marketing muscle. Ghosn will have to work miracles to revive the brand in North America, and that's a key reason why he's dialing back his commitment to Nissan. Bear in mind that it might not work, but managing an Mitsubishi exit could also be if the offing — which would also demand a lot of Ghosn attention.
Ghosn remains the model of a business leader from the pre-Trump era of ascending globalism. Born in Lebanon, raised in Brazil, educated in France, he transformed the Renault-Nissan Alliance into the fourth biggest carmaker in the world by share. His specialty is in managing far-flung, diverse enterprises, and his lifestyle is far more peripatetic. His only competition is Fiat Chrysler Automobiles CEO Sergio Marchionne, an Italo-Canadian who oversees Fiat, Chrysler, and Ferrari, with operations in the US and Italy and headquarters in London.
Ghosn has been placed in an awkward position since Donald Trump's win in the 2016 presidential election. At the Detroit auto show in January, Ghosn visibly grappled with Trump's America First doctrine while continuing to affirm his commitment to the free trade that makes the Renault-Nissan Alliance work.
Nissan builds cars in the US and has for decades, but the factories are located in the South, in states that Trump doesn't need to win in 2020. The President's focus has been much more on GM, Ford, and FCA, leaving Ghosn out in the cold.
The advantages of an alliance
The alliance's structure in this respect is a help, as Renault-Nissan isn't overly dependent on the US. But the US is a huge market for the carmaker, and even though Mitsubishi isn't a big player, the market got larger in 2016 with the tie-up.
In any event, we're unlikely to see more Ghosns in the future. The idea of a global super-CEO is in retreat, and running a global automaking alliance has meant that Renault-Nissan is lagging the likes of GM, Ford, and even Tesla on the transformation of the business from one that sells cars to one that provides mobility.
Renault-Nissan has been out in front before — the debut half a decade ago of the all-electric Leaf is a good example — but the focus now is on swift innovation with unfamiliar new technologies, whereas Renault-Nissan has been all about the complexities of management.
In fact, you could argue that of all the automaking CEOs around, Ghosn has the toughest job at the moment. The alliance embodies the principles of internationalism, globalism, and free trade — everything the Trump administration wants to do away with.
He's probably up to the challenge. But to make it work, he's wisely trimming back his commitments.
NOW WATCH: Nissan's redesigned GT-R is a beast worthy of its 'Godzilla' nickname