Lebanese-born businessman started with a company on ‘the brink of collapse’

Habib Battah
Daily Star staff

The Lebanese-born CEO and president of Nissan, Carlos Ghosn, offered advice about management, debt-reduction and the economic challenges facing the region during a short visit to Beirut Saturday.
As he delivered the keynote speech at the Financial Markets Association World Congress (known by its French acronym, ACI), Ghosn, who has been called one of the 10 most powerful men in the world, explained some of the strategies that led to an unprecedented revival in Nissan during his time at the company.
“Our company has shifted from the brink of collapse to record profits in just three years,” Ghosn said, noting that Nissan had been the most in-debt automaker in the world when he took power in 1999.
Faced with declining profits and a suffocating $19 billion debt, the company was in “a state of crisis,” he said, “and you have two choices in the midst of crisis. You can justify it and continue to decline or you can use it as an opportunity to seize your own destiny.”
After setting up a large task force to “eliminate weakness and leverage company strengths,” Ghosn implemented two three-year recovery plans, both of which carried publicly announced goals and deadlines.
Today, according to Ghosn, Nissan’s share price is three times greater than in 1999, and market capitalization now stands at 6 trillion yen, five times greater. Revenues for 2003 are projected to rise at 10 percent, all performance objectives have been achieved since 1999, and company debt has been reduced to zero.
Ghosn emphasized several lessons learned along the way, including the importance of profitability, vision and personal motivation among employees.
“Lack of profit is like a fever,” he explained. “When your business is not profitable that’s a serious sign something is wrong. If you ignore a fever, you can get very sick if you ignore profitability, the situation will only get worse.”
Companies should prioritize profit maximization over market share, he stressed, claiming profits allow investments in technology, product development, human resources and increases in shareholder rewards. 
A company also needs to ask itself tough questions, “outline a clear and uncompromising diagnosis of the situation, show a clear perspective, build a simple strategy for the future and make sure that every employee can understand it and share it at all levels of the company.”
Ghosn said the most significant factor in achieving performance was personal motivation. Nissan management led by example, he explained, and shared corporate vision as well as the threat of collapse with all employees.
“We made no excuses and accepted none in return,” he said. “Management is about honesty, either you’re progressing or you’re not.”
In a question-and-answer session after his speech, Ghosn was asked if the plan that rescued Nissan from $19 billion of debt could also be adapted to the situation in Lebanon.
He said the plan could not be completely copied, but its principles could theoretically be adopted by “any company, country or civil administration.”
Asked if he agreed with the Lebanese government’s plan to reduce over $30 billion of public debt, Ghosn declined to comment, saying he lacked access to all of the relevant information.
“All that I can say is that there is no problem without a solution. As long as you really want to solve something and you have the support, then it can be done,” he told the Daily Star.
However the entire Middle East has difficulty attracting international investment because it is a small market without economic contiguity, he explained.
A starting point, Ghosn said, would be eliminating economic barriers between Arab states, which may not always exist on paper but are nonetheless real.