Former Nissan Chairman Carlos Ghosn's career was abruptly halted 14 months ago with his arrest in Japan on charges of financial wrongdoing. After an audacious escape from custody and a surreptitious trek to Lebanon, he declared that he was determined to restore his personal reputation. But however his legal troubles play out, there are growing questions about another aspect of his reputation: whether he left Nissan in good shape.

Less than three years after Ghosn gave up the top job at Nissan, it has slipped into a deep slump. Revenue and profits are falling in markets around the world. Sales in the United States -- its most crucial market after China -- fell 11% in 2019, a staggering decline at a time when auto sales are at near-record levels.

Analysts and industry executives lay much of the blame for Nissan's woes on Ghosn. Over his last eight years at the helm, he led an unrelenting push for growth, often at the expense of the bottom line. To satisfy his demands for higher sales and more market share, Nissan executives turned to questionable practices that alienated a critical constituency: the dealers who sell its cars.

"Almost nobody calls now and says, 'I want to buy a Nissan franchise,'" said Alan Haig, president of Haig Partners, which advises buyers and sellers of auto dealerships. "Carlos pushed too hard. He had very ambitious goals, and he pushed his managers to achieve them. He created a temporary situation that looked good for a while, but it was artificial."

In an interview last week in Beirut, Ghosn said Nissan was doing fine when he stepped aside as chief executive officer three years ago, and he blamed his successor, Hiroto Saikawa, for the company's problems.

"I think he's unfit to be CEO, particularly when he spent this time not taking responsibility for the situation in which the company was," Ghosn said.



Travis Parman, a spokesman for Nissan's North American division, declined to comment on Ghosn's remarks, but acknowledged that a strategy of "volume at any cost" had sometimes driven "bad behavior" by the company.

Ghosn, who was educated in France, started his career at French tire-maker Michelin, becoming head of its North America operations. He moved to Renault in 1996 as executive vice president and helped lead a turnaround. His skill at improving profitability earned him the nickname "Le Cost Killer."

When Renault bought its stake in 1999, Nissan was near collapse. Ghosn slashed thousands of jobs, drawing criticism in a country not accustomed to mass layoffs, but Nissan quickly returned to profitability. In 2005 he was named CEO of Renault as well, becoming the first person to head two Fortune Global 500 companies at once. By then, Nissan was often more profitable than Renault, although the French company remained the senior partner in the alliance.

In 2011, as the industry was recovering from the deep recession of 2008 and 2009, Ghosn stood before hundreds of reporters in Yokohama and announced an ambitious plan for Nissan. Over the next eight years, he said, Nissan would raise its share of the global market to 8%, from 5.8%. He planned to do this by investing heavily in the emerging markets of Brazil, Russia, India and China.

The U.S. market, where the economic recovery promised several years of rising auto sales, had a special role. There, he promised, Nissan's market share, including the Infiniti luxury brand, would rise to 10% by 2017.

To drive growth, Nissan introduced new models and aggressive incentives that imposed ambitious sales quotas and tough terms on dealers. The incentive scheme Nissan favored, known as a stair step, awards cash bonuses to dealers as opposed to the more familiar rebates given to buyers. But it was essentially an all-or-nothing deal: Dealers got substantial bonuses only if they hit sales goals.

Dealers often sold cars at fire-sale prices in the last days of the month to make it over the line. That irritated customers when they learned that a neighbor paid thousands of dollars less for the same car, some dealers said. Other dealers simply bought cars themselves, held them for a few months and then offered them as used cars.

By the middle of the decade, many dealers were losing money, despite the robust economy, and looked to sell their franchises.

It didn't help that Americans were gravitating strongly toward trucks and SUVs -- which produce bigger profits -- and away from sedans and compacts, which Nissan relies on for a large portion of sales.

With the deadline for Ghosn's goal of 10% market share a few years away, Nissan's U.S. executives increasingly took aim at smaller dealers, imposing ever more demanding terms to ramp up sales. Inside Nissan, the effort was known as "Grow or Go."

In 2017, Ghosn's final year as chief executive, Nissan sold 1.6 million cars and trucks in the United States, a 53% increase from 2011, and enough to give it 9.2% of the market, short of Ghosn's target. But the incentives it was paying out were starting to eat into profits, and many of its remaining dealers were fed up with chasing higher sales year after year.

In the six-month period ending Sept. 30, Nissan's operating income fell 85% from the same period a year before. In North America, profit declined 57%.

This document may not be reprinted without the express written permission of Arkansas Democrat-Gazette, Inc.

Material from the Associated Press is Copyright © 2020, Associated Press and may not be published, broadcast, rewritten, or redistributed. Associated Press text, photo, graphic, audio and/or video material shall not be published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium. Neither these AP materials nor any portion thereof may be stored in a computer except for personal and noncommercial use. The AP will not be held liable for any delays, inaccuracies, errors or omissions therefrom or in the transmission or delivery of all or any part thereof or for any damages arising from any of the foregoing. All rights reserved.

Excavator Bearing Roller

Komatsu Engine, Cummins Engine, Hitachi Engine - Qianyu,https://www.sdchina-excavator.com/