A FreshAlloy Editorial
Well, you hear the rumors, but you can choose to believe them or not. Carlos Ghosn going to GM? Or at least meeting them in Paris to discuss ?partnership?? GM and Ford getting together with Nissan? Two car companies in trouble and here comes Carlos to save the day. Not so fast you say? True enough, Carlos convinced Japan to give him unilateral power to ?save? the company. His first great quote, ??.The is no car company problem that can?t be solved with great product?? came as he surrounded himself with some great people and they produced great product.
Now that things are heating up ? the latest Ghosn quote seems to be a 180 from the previous one. ??There is no car company problem that can?t be solved by great management?? Well, let?s shed some light on this apparently new shift in paradigm. Great People ? Nissan put a team together that wrung out everything they could get from the great ?Z? and put most likely another 10 years into the product. Just using the VQ engine platform in so many chassis?s was brilliant. The G35, the M and the FX were all show stoppers out of the gate and portend a lot of great things going forward. The personnel behind the design and production of these vehicles and these strategies need to be applauded for their insight. Yet, the culture of cost-cutting has resulted in the current mess with 4 cylinder Altimas and Sentras, a mess that is estimated to cost around $1 BILLION to fix. All because of alleged desire to save 30 cents on piston rings.
Cost cutting ? ??There is no car problem that can?t be solved by great management?? Reducing costs was the primary reason given for moving Gardena to Nashville. But that move has turned into a disaster of epic proportions for NNA.
Some who moved to Nashville say ??it?s nearly impossible to get anything done since Ford/GM and Chrysler "camps" have been set-up and there aren't enough experienced NNA managers to tell anyone how things are supposed to get done. Furthermore, many of the talented people from Gardena are now working for Honda, Toyota, Mazda, Hyundai, Kia, Suzuki, others - and we have to assume, locked in their cerebellum, was vast, detailed knowledge of all of Nissan's future product plans going out many years. Do you think? The cost of this is staggering and will be felt by NNA for a decade or more.
The departure of some key people throughout the Nissan and Infiniti Product Planning teams cannot be replaced easily, no matter how good ?the management? is. The entire Infiniti G35 team is gone, as is the core of the GT_R and new Flagship teams. In fact only 2-3 people remain from the entire Infiniti Product Planning team. Include the loss of the 350Z and NISMO management teams and you can predict for yourself where Nissan?s futures lies.
The Cross Car Line teams are almost completely destroyed; only 1 person from the team that handled interior cabin comfort and entertainment systems made the move. The small sedan and truck groups were all but completely wiped out. The whole Frontier/Xterra team is gone as well as the Sentra/Versa team. Where were Human Resources when all this was happening? Cost cutting at the expense of great product? We might add that the loyalty of Nissan enthusiasts rivals those of Ford, Toyota, Honda and Corvette, just to name a few.
Looking beyond just Product Planning, entire departments were almost completely wiped-out. Pricing strategy, Market Insight, Corporate Communications, Model Line Marketing and Corporate Training have been reduced so extensively that many of them were asked to stay on as contractors just to get vehicle launch work completed. Some departments endured a 95% attrition rate, and the departments who are considered to be largely intact lost ?only? 50% - 60% of their employees. Nissan?s claims of 43% retention would be a disaster by any definition at any other company.
As for NNA touting the retention of some 80% of their top executives (now closer to 70% after some recent defections), we would have to assume that these people don?t actually know how to do the detailed, day-to-day work. They are not in the trenches where they would have to how to do a price-value comparison document against a competitor. They would have to know how to coordinate several suppliers and engineering groups to bring an accessory to market. They would have to know how to decide which features to include on a vehicle, or in which option package. Good management can be great if they have the resources to do the work.
Nissan?s global leadership needs to be held responsible for what they?ve done to the American business unit ? where some 70% of global operating profits are made. Enthusiasts should be very concerned for their favorite brand because deciding to save a buck per engine was more important than making a great engine. And when people like Jim Morton put his young son, in his early 30s, as the head of the NNA finance department, it doesn?t take a rocket scientist to see that ?what?s best for Nissan? wasn?t the only thing driving the decision to move.
A shame, isn?t it? Because of this, to wait perhaps ?till 2012 for some more great products. It will be very difficult for the next few years and there is little hope of them gaining any traction until 2012 model year (due to normal product development cycles.)
And right on the heels of the Nashville move and its ramifications, YTD sales thru August are negative on every model line except Frontier, Murano, and the ?M?. And in the month of August alone, there are minus signs next to all of them except Sentra, Maxima, and Frontier and Murano! Should we then assume there will be more cost-cutting measures put in place?
Carlos Ghosn, Ghosn, gone? We think he sees the colossal mess he and his buddy Jim Morton have caused and he wants OUT before his reputation as a 1-trick cost-cutting pony is cemented in the minds of the auto industry insiders. Carlos, it?s the people that make great companies! It?s also, you?re loyal customers. The majority of Nissan and Infiniti enthusiasts would rather ?fight than switch?. Now, we?re not so sure
http://www.freshalloy.com/site/features/oped/dear-ghoshn/002/default.asp
read it, and see the damage gohsn has caused Nissan, it is insane.
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