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Industryweek 7409 Carlos Ghosn G

Who Will Lead Nissan? Defections Ignite Questions About Next CEO

Sept. 21, 2014
The resignations brought into focus renewed concerns about who Ghosn would install at the top when he decides to step down from Nissan and his dual role as head of Renault, following a management reorganization last year.

TOKYO - A string of defections by top Nissan (IW 1000/31) executives is reigniting longstanding questions about who will succeed chief executive Carlos Ghosn, the man widely credited with reinventing Japan's No. 2 automaker.

Speculation about Nissan's future hit a fever pitch earlier this month after the resignation of Andy Palmer, a widely respected Ghosn lieutenant, who took up the top job at British sports car maker Aston Martin.

That followed the July departure of Johan De Nysschen, who led Nissan's Infiniti luxury brand, to become the head of General Motors' Cadillac unit, while Carlos Tavares quit the Renault-Nissan alliance last year to run French rival PSA Peugeot Citroen (IW 1000/55).

"It's a loss for Nissan -- they'll be hard to replace, especially Palmer," said Christopher Richter, an auto analyst for brokerage CLSA in Tokyo.

The resignations brought into focus renewed concerns about who Ghosn would install at the top when he decides to step down from Nissan and his dual role as head of Renault (IW 1000/80), following a management reorganization last year.

The 60-year-old executive has only said that the decision was up to shareholders, stoking questions about whether the opaque timeline led possible successors to dust off their resume and try their hands elsewhere.

Andy Palmer was "very high ranked, also ambitious, but he would not have a chance to run Nissan by himself any time soon," said Hans Greimel, Asia editor for U.S.-based Automotive News.

"I don't think that Carlos Ghosn is pushing these guys out, but without doubt he is a very demanding boss to be working under."

I don't think that Carlos Ghosn is pushing these guys out, but without doubt he is a very demanding boss to be working under."

— Hans Greimel, Automotive News

Nissan -- which makes the Altima sedan, X-Trail SUV and Leaf electric vehicle -- has aggressively lured top talent under Ghosn, who came to Nissan in 1999 as chief operating officer.

He was dispatched by Renault after the French firm took a stake in the Japanese automaker which was then on the brink of bankruptcy.

Ghosn Sets a 'Very High Bar'

Nicknamed "Le Cost Killer," Ghosn, one of a handful of foreigners to lead a Japanese firm, embarked on aggressive cost cutting and won kudos for resuscitating the company's battered balance sheet.

"He commands a lot of loyalty, because he is so smart and skilled at his job," Greimel said.

"At the same time he sets very high bar and he is not afraid to make his executive[s] be responsible for missing their targets."

Nissan is unique among most Japanese firms, including rival Toyota (IW 1000/8), where executives are usually promoted internally, and tend to stay for life, said Barclays auto analyst Tatsuo Yoshida, a former Nissan employee.

"Nissan's senior executives are very capable and experienced -- they're the type of business people whom other firms want" said Yoshida.

"They've gone through trial by fire [at Nissan], but they only get better opportunities" when they leave, Yoshida added.

The company shrugged off the departures, and pointed to the hiring this month of Renault executive Philippe Klein -- who had previous stints with Nissan -- to replace Palmer as chief planning officer.

It also brought on BMW executive Roland Kruger as head of Infiniti, which has struggled against other top-end brands including Mercedes and Toyota's Lexus brand.

"It's a natural part of the automotive business," said Jeff Kuhlman, Nissan's vice president of global communications.

'No one is Irreplaceable'

"We've been as successful as any manufacturer has to attract top talent to the organization."

Greimel said it would take time for the new hires to settle in.

"No one is irreplaceable, but Palmer and Nysschen had an intimate knowledge of Infiniti, and without them, it will take some time for the brand to find its stride," he added.

A source, who asked not to be named, said Ghosn has a succession plan but won't make it public to avoid creating "distractions" at the company.

But Nissan's chief was likely to stay on until at least 2017 in a bid to put his stamp on an ambitious business plan dubbed Power 88.

The plan aims to hit an 8% global market share and 8% operating profit, up from 5.7% and 5% in the first quarter, respectively.

"I would imagine [Ghosn] would like to apply the plan" Greimel said. "He wouldn't leave before then."

 Copyright Agence France-Presse, 2014

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