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Nissan's chief dropping a title

As part of a shake-up, he will no longer be chairman of North American operations.

March 17, 2007|John O'Dell | Times Staff Writer

Nissan Motor Co. Chief Executive Carlos Ghosn has been adding titles to his business card for years. On Friday he subtracted one.

As the No. 3 Japanese automaker faces its first profit decline in seven years, the famously hyperactive executive is giving up his post as chairman of Nissan's North American management committee April 1.

The change comes as part of a shake-up designed to improve the management structure at Nissan, which has stumbled in several regions, including the all-important U.S. market, where sales fell 5.3% last year from 2005.

Ghosn said in a statement Friday that he needed to spend more time working on "the multiple challenges facing Nissan" globally.

The executive, who has headed North American operations since 2004, will refocus on his jobs as CEO of both Nissan and its partner and controlling stakeholder, French automaker Renault.

Ghosn was at Renault when, in 1999, it bought a controlling stake in the then-failing Japanese company. He became Nissan president in 2000, tacked chief executive on to his title in 2001, took on the North American management committee post in 2004 and became Renault's president and CEO in 2005 as well.

He is credited with one of the most successful restructurings in auto industry history, propelling Nissan into the top ranks for performance with six straight years of record earnings through its fiscal 2006.

But as both Nissan and Renault have slipped in the last year, many industry watchers have criticized Ghosn, saying he has spread himself too thin.

"After he saved Nissan in Japan, he believed his press and thought he was superman," said Arizona-based industry analyst David Healy of Burnham Securities.

The challenge facing Ghosn and his team at Nissan is to reverse a dramatic slide in Japanese sales, continue boosting the company's presence in other Asian markets and Europe and reinvigorate U.S. sales.

"Each of the markets is unique and requires a different product mix and management styles, so it's probably more effective to have different people responsible for each region," said analyst Jesse Toprak of in Santa Monica.

Nissan's Japanese sales this year through February were off 16% from the same period in 2006 as the market there shifts to smaller, more fuel-efficient mini-cars. Nissan buys its mini-cars for Japan from other manufacturers.

Ghosn is updating plans to help the company meet the goals in a three-year plan launched in 2005 and has said that details will be released in April.

Company executives in Japan have said they badly misread the U.S. market, which was hit last year by soaring fuel prices that cooled demand for larger trucks and cars and increased demand for more fuel-efficient vehicles.

And unlike rivals Toyota Motor Corp. and Honda Motor Co., Nissan has largely ignored fuel economy in its marketing in favor of pushing its image as a manufacturer of sportier, performance-oriented vehicles.

Although U.S. sales were up 7.2% for the first two months of this year from the same period in 2006, that growth has been accomplished with less-profitable small cars such as the Versa.

In addition, Nissan's move into the full-size pickup truck market late in 2003, accompanied by a new factory in Mississippi, has yet to gain traction: Sales of the Titan pickup were off 13% through February after falling 17% last year.

Adding to its North American problems, Healy said, was Nissan's decision last year to relocate its North American headquarters to Nashville from Gardena.

The company lost many top managers and at least 60% of its headquarters staff in the move. "It will take years for them to rebuild," Healy said.

With Friday's executive changes, Hiroto Saikawa, now executive vice president accountable for the European market, will take charge of the North American management committee. Nissan's chief operating officer, Toshiyuki Shiga, remains chairman of the management committee for Japanese operations. These shifts are also effective April 1.

Nissan North America spokesman Fred Standish said daily operational responsibilities for the Nashville-based operation would continue to be handled by five senior vice presidents in the U.S.


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