Jump-Start or New Battery for G.M.? July 7, 2006
Directors of General Motors are scheduled to meet Friday to discuss whether to open talks on a three-way alliance involving G.M., Renault and Nissan.
DETROIT, July 6 ? What would Carlos Ghosn bring to the table?
It is a top-of-mind question for directors of General Motors, who are scheduled to meet Friday to discuss whether to open talks on a three-way alliance involving G.M. and the two companies that Mr. Ghosn runs, Renault and Nissan.
Arguably the most famous executive in the global auto industry, Mr. Ghosn earned his reputation for quick restructurings at Renault in the 1990’s and at Nissan this decade.
While both companies have hit speed bumps lately, it is Mr. Ghosn’s decisive methods that led G.M.’s largest investor, Kirk Kerkorian, to reach out to him, and push for ways to get him involved in G.M.’s turnaround effort. That effort is unfolding at a slower pace under the leadership of G.M.’s chief executive, Rick Wagoner, than Mr. Kerkorian would like.
Industry analysts expect the G.M. board to approve exploratory talks about a possible alliance, under which Renault and Nissan would each take a 10 percent stake in G.M., in a deal worth $3 billion.
After all, if G.M.’s board were to decline, it could incur the wrath of shareholders beyond Mr. Kerkorian. But how seriously the company would pursue the talks remains to be seen.
News reports this week have suggested that G.M.’s management believes its turnaround plan would be hindered, not helped, by an alliance with Renault and Nissan.
Executives at Mr. Kerkorian’s company, Tracinda, said Thursday that they were angered by the reports of G.M. management’s trying to influence the board. They added that G.M.’s board must decide for itself whether to pursue an alliance.
A G.M. spokesman said Thursday that management was not trying to influence the board’s decision.
G.M.’s board has consistently backed Mr. Wagoner in recent months, but Mr. Ghosn, who has the support of his own companies’ to pursue an alliance, now offers an alternative.
“Take Ghosn out of the equation and no one would be talking about this,” said James P. Womack, president of the Lean Enterprise Institute and author of “The Machine That Changed the World,” about Japanese auto plants in the United States.
Mr. Ghosn represents a sharp contrast to Mr. Wagoner. The two men have their relative strengths and weaknesses, but their approaches to management and leadership could not be more different.
Where Mr. Ghosn swooped in with clearly defined turnaround plans, Mr. Wagoner has unreeled his efforts at G.M. at a far more measured pace. Where Mr. Ghosn has articulated his vision in speeches, television interviews and best-selling books, Mr. Wagoner’s public appearances are less frequent and his descriptions of the company’s challenges and actions are often described in more clinical terms.
In a sense, the two leaders could complement each other. Mr. Ghosn, in fact, has much in common with G.M.’s vice chairman, Robert A. Lutz, another well-known figure whom Mr. Wagoner brought in as a “car guy” to enliven the look of G.M. vehicles. By all accounts, Mr. Wagoner and Mr. Lutz have worked together seamlessly, with Mr. Lutz’s passion for bold design meshing well with Mr. Wagoner, an M.B.A. who rose through G.M.’s finance staff.
Mr. Ghosn is known for bold strokes with design, too. But he is a manager who has dived into every company he has run, a trait that would put him in conflict with Mr. Wagoner if an alliance came about.
History would suggest the two men might clash over timetables for change.
Consider, for example, the way the companies approached developing two hot sports cars. In 2001, with its financial problems just beginning to ebb, Nissan showed a concept version of its 350Z at the Detroit auto show. The car, whose design won rave reviews, was on sale just 20 months later.
G.M., which won similar applause for the concept version of the Chevrolet Camaro at this year’s Detroit show, has spent the months since then exploring whether a business case could be made to justify building the car. Even if the G.M. board approves it at Friday’s meeting, a production version is not due for three years, analysts say.
A similar pattern emerges in their broader approaches to change.
In quick succession, Mr. Ghosn has rolled out three programs at Nissan over the last seven years, each with a snappy name and clear goals.
- Posted in : Uncategorized, GM
- Author : arnold
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