Nissan: What Drives Carlos, Chapter 2: "Early Career"

What’s life like as a tellurian CEO? In this special multi-part series, Nissan Motor Co., Ltd. CEO Carlos Ghosn shares his life story, charity personal insights and maestro lessons on what it takes to succeed.



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On a hurl with Michelin: Forgoing offer studies to join a tire builder brought lessons of a opposite kind

One day in May 1978, during around 8:30 in a morning, we woke adult to a differing sound of a phone ringing. When we answered, a male on a other finish of a line identified himself as Hidalgo.

In usually his third year with a company,
the 26-year-old Ghosn was promoted to
manager of a plant in Le Puy.

“The Michelin Company in France would like to enhance a business in Brazil,” he said. “They need French engineers who are informed with a internal environment. Would we like to have an speak in Clermont-Ferrand?”

The matter for this call was my sister, who had told Hidalgo about me in Brazil. we called my sister right after we hung up. When we told her we was hardly interested, she said, “It sounds like a good opportunity. Why wouldn’t we take it?”

Clermont-Ferrand is a provincial city located in executive France, home to a tire manufacturer Michelin. At a time, we was 24 years old. we had progressed to a second master’s turn of a grandes ecoles universities, earning a grade during a Ecole des Mines. we was deliberation entering a doctoral module in economics and hadn’t suspicion many about starting my career.

But a word “Brazil” rang in my ears. we hadn’t lived there for 18 years, yet it was my hearth and my devout home. My father and many kin still lived there. The suspicion that someday we competence be means to work during French companies in Brazil was an appealing prospect.

I took a interview. It went good — a association was clearly meddlesome in employing me, and it wasn’t prolonged before they done me an offer. It wasn’t easy to pierce from Paris to a panorama of Auvergne, yet we kept revelation myself, “Brazil is waiting.” we motionless to finish a tyro section of my story to embark on a new adventure.

A hundred people entered a association during a same time. We became accessible during a 3 months that we lived underneath a same roof, holding seminars during all a vital departments of a association and dining and roving together on weekends. It was a time of personal and maestro growth. Surprisingly, even yet it was a training period, we mostly had opportunities to solve dire association problems. Michelin mostly gave beginner employees a possibility to advise ideas on vicious issues, such as how to make prolongation processes some-more fit or how to best conduct tender latex.

After ubiquitous training, we changed to plant training. We cut and ecstatic tender rubber. Mostly we were operative in 3 shifts, including one late during night. It valid a good training opportunity, training us not usually about a rubber prolongation process, yet also about peculiarity control supervision and how to put skeleton into action.

I spent mangle times personification cards with a maestro workers. Even yet we had usually come out of a grandes ecoles system, we found we was means to forge clever holds with a workers during a plant.

After training, we were any reserved a plant. Le Puy, where vast tires were manufactured, was my initial assignment. we had an seductiveness in improving capability and toured a site many times each day. The significance of effective communication fast became apparent to me and was reinforced each day. This wasn’t something we had schooled in my schooling, yet it was one of a biggest lessons from my early career.

I trafficked to plants around Europe and shortly got my “big break.” It was a tellurian epoch for Michelin. Management was targeting one abroad plcae after another, and a association incited to a younger epoch of executives. we was promoted to manager of a plant in Le Puy in my third year with a company, during a age of 26. This was capitulation of my quantifiable success and fast formation into a company.

Michelin was a normal house in many ways, yet it was also advanced. we was not a French national, yet we was authorised to possess such a pursuit pretension and share such shortcoming with other executives during a immature age. This honesty was due to a celebrity of a grandson of a founder, Francois Michelin, a male with a tip standards and a low seductiveness in people.

My categorical plea was to build trust and relations with my comparison subordinates. we spent a lot of time cultivating teams that could solve problems together. Two years passed, and when a supervision of a bureau was entirely on track, someone seemed from a domicile office. It was Francois Michelin himself, and he had a new event to offer me.

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Turbulence and Triumph in Brazil: A Transfer Across a Atlantic Helps Me Hone My Reform Chops

The initial thing we beheld about Francois Michelin was his height. What we schooled by operative beside him was that he was also sophisticated, cool and polite. He was allocated co-owner of a Michelin tire association in 1955 and hold that position for some-more than 44 years. He was many some-more than a manager of a family business: Michelin’s globalization was a outcome of his astuteness and ability.

Carlos Ghosn, left, after being eliminated to Brazil

He offering me a pursuit operative during Michelin domicile underneath Behrouz Chahid-Nourai, a arch financial officer. Two practice would be vicious to my career. The initial was a expansion of cross-manufacturing — a element that would offer me good in this pursuit and all others. This judgment emerged formed on my research of Kleber-Colombes, a tire manufacturer focused on automobiles, vans and plantation apparatus that Michelin had taken financial control of years earlier. The association was doing poorly, yet Michelin didn’t wish to desert it. Instead, Michelin engrossed Kleber-Colombes’ car tire business as a bill code and employed a same prolongation line to make both brands.

Another pivotal event was a possibility to work with Chahid-Nourai. He taught me a concepts and practices of cutting-edge corporate finance, including a techniques for optimizing resources. Seven years after we assimilated a company, Francois Michelin sent me to Brazil, that non-stop a vast doorway for me.

In 1985, we was finally eliminated to Rio de Janeiro, where we could be tighten to my relatives and sisters. My family was happy about my new assignment. However, a predicament of Michelin Brazil done it distant reduction than an ideal situation. The nation was mired in domestic unrest, traffic with a financial predicament and had, until recently, been ruled by a troops regime. Hyperinflation had exceeded 1,000% a year, and businesses there were experiencing vast losses. In fact, outrageous debt was apropos Michelin’s primary regard in Brazil.

Despite these challenges, we deliberate a nation to be a intensity value trove of event for Michelin. Brazil’s healthy resources were abundant, and a outrageous marketplace intensity was allied to that of China, Russia and India.

I worked tough to exercise reforms. Michelin had purchased dual outrageous rubber plantations in Brazil. Performance had stagnated, yet it was essentially due to outmost factors, especially a cost controls intended by a government. we instituted negotiations with a government, perplexing to secure capitulation to lift prices. Simultaneously, we emphasized prudent supervision and control of money flow. Extreme measures were required. And while a people during Michelin domicile in Clermont-Ferrand were frustrated, we was indifferent in my resolve. In a end, we was means to revive a Brazilian operations and settle shred care in a marketplace.

Around this time, however, a labor kinship transformation grew some-more violent, and workman strikes became some-more frequent. One day, notwithstanding being cautioned opposite it by a managers around me, we went alone to a bureau whose workers were on strike to hear their concerns. we did not confront any hostility; all they wanted to do was talk.

After 3 years of turbulence, a Brazilian operations stabilized. Because of a despotic money upsurge supervision measures we had put in place, a auxiliary was producing good results. Trust from domicile increased. we was 31 years aged during a time. If we consider about it now, my actions represented childish indiscretion, yet we trust we was right to contend a bullish proceed toward growth.

One day we perceived a summary from Francois Michelin saying, “The aged married confederate would like to revisit Brazil.” we was grateful. The trainer we devoted was examination over me. He came to Brazil with his mother in 1987. we spent 10 days with him, furloughed factories and plantations all over a country. He showed seductiveness in all and treated everybody with respect, regardless of amicable category or pretension — a estimable personality in this epoch of globalization.

After he returned home, we was presented with another plea that would reshape my career: we was to go to a U.S., a fiercely rival segment and Michelin’s biggest abroad market. we was told that Francois Michelin wanted to leave all to me. After a Christmas holidays, my immature family and we left my homeland once again.

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Warm Welcome, Big Challenges in America: Lessons in Integration, and from Iacocca, in a World’s Toughest Market

In Feb of 1989, we arrived in a U.S. to start my new assignment. My family and we would be vital in Greenville, South Carolina, a tiny city with traces of a Old South. It was a rarely eremite and welcoming place, and we basked in a regard of southern hospitality.

Carlos Ghosn pronounced his family was treated to
“Southern hospitality” in South Carolina.

When we got there, we were a family of three. Our second and third daughters, and a initial son, would be innate in a U.S. It was a happy time in my life, not usually since of a flourishing family yet also since of a rewarding work. My goal was to lead Michelin’s merger of Uniroyal Goodrich, a vital U.S. tire company, during a time of mercantile downturn.

At a time, a U.S. had a biggest automobile marketplace in a world, and Michelin had to settle a clever participation if we wanted to be a contender. we felt substantial vigour from headquarters, and foe was fierce. Goodyear, a U.S. company, was a attention personality in tire manufacturing, and Japan’s Bridgestone had usually acquired a mythological U.S. code Firestone. Michelin had no time to waste.

The merger of Uniroyal was authorized in a early 1990s, and we faced some problems right away. Uniroyal had a vast register of aged apparatus and had not invested in replacing pivotal parts, creation prolongation delayed and inefficient. Under a terms of a merger agreement, Michelin had negotiated a closures of 3 plants in North America, that was met with complicated criticism. We simply could not means them. This warranted me a nickname “The Cost Cutter.” But we didn’t mind — we knew cost-efficiency was a pathway to recovery.

Cost slicing was usually partial of a strategy. We also indispensable to entirely confederate a business to grasp limit synergies. To do this, we combined an executive cabinet stoical of a many gifted people from Michelin and Uniroyal. This would be a first, unsophisticated, indication of a “cross-functional team” employed with success in a Nissan Revival Plan a decade later.

The alloy of cultures was a initial vast plea for Michelin. As a provincial association from France’s Auvergne region, a approach of doing business was opposite than that of U.S. companies. If we wanted to jump brazen as a tellurian company, a U.S. concentration on short-term distinction would need to come together with a European family-owned supervision style, that focuses on long-term results. We done a series of other operational changes: We adopted a multibrand plan in North America, in that we reserved Uniroyal to a categorical terrain of a aftermarket, where code energy was some-more vicious than in a original-equipment marketplace. But we kept Uniroyal’s conduct bureau during a normal domicile in Akron, Ohio.

This was a time for me to privately learn by doing. In Brazil, we had battled opposite a supervision to lift prices, yet in a U.S. we battled rivals in a market. Competition was everything.

We had suggestive successes. Uniroyal was one of a many poignant suppliers of tires for what was afterwards a world’s largest carmaker, General Motors. GM was a inexhaustible association and frankly supposed a takeover by Michelin. We were also means to settle hit with Japanese automakers. we trafficked several times to a North American plants of Toyota Motor, Honda Motor and Nissan Motor, including Nissan’s plant in Smyrna, Tennessee. Japanese carmakers were on a hurl during this time, and we had a feeling that they would stand to a tip of a world’s automotive industry, and soon.

I also schooled a good understanding about leadership. There were many considerable leaders in a automotive industry, including Lee Iacocca and Robert Lutz, who left Ford Motor for Chrysler and served as clamp boss underneath Mr. Iacocca. Lutz was an big man. we invited him to a convention during Michelin, and he told a crowd: “Before, we couldn’t suppose who would buy a Chrysler vehicle.” we was repelled he would contend something like this during first, yet we satisfied that he was a master of communication. He told it like it was and didn’t use fabrications or flattery. we could tell a assembly was impressed. To be honest, so was I. He was an vicious change on my care and communication style, and we have stayed in hit over a years.

In short, things in a U.S. were going really well. Then we perceived a call from Francois Michelin. He was promulgation his son to come work for me.

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On to a New Adventure during Renault: After 18 Years during Michelin, we Accept an Offer to Help Revive a French Carmaker

Edouard was a youngest son of Francois Michelin. When he arrived to work for me, we put him in assign of a critically vicious truck-tire prolongation and sales departments. His good manners and honour for U.S. etiquette warranted him an glorious repute among his colleagues.

Carlos Ghosn, left, after being eliminated to Brazil

Because Michelin was a family-owned business, it was insincere that Edouard would attain his father. As such, we never approaching we would strech a really tip of a association – we did not have a right final name.

In 1996, after about 7 years of operative in a U.S., there was a vital restructuring of a business. we was put in assign of a tellurian tire operations for newcomer cars and tiny trucks, and served as a boss of a North America office. Essentially, we had climbed to a No. 2 position.

But would we be happy to stay in that position forever, meaningful we couldn’t stand higher? we wasn’t so sure. So when we perceived a call from a headhunter, an alumnus of a Ecole Polytechnique, we concluded to meet. Over dinner, he asked if we was meddlesome in a automotive industry. Renault was looking for a No. 2 who could eventually arise to be a tip executive. He organised a assembly between me and Renault Chairman Louis Schweitzer.

At 8 a.m., we met with Schweitzer for an hour and a half during Renault domicile in Boulogne-Billancourt, a suburb of Paris. He mentioned that a company’s second-in-command was about to retire, and he was looking for a intensity successor. He pronounced we was their tip candidate.

My categorical proclivity for holding a pursuit during Renault wasn’t a awaiting of one day using a company. Rather, we was meddlesome in a event to investigate new things and take on new challenges. we had always been meddlesome in cars and formidable products that compulsory teams of people and supply bondage to work in tighten coordination.

After a house meeting, we told Francois about a assembly with Schweitzer and my goal to leave Michelin. For a impulse he seemed surprised, yet afterwards he pronounced simply, “Please let Edouard know.”

After 18 years during Michelin, my heart was complicated during a suspicion of withdrawal — both a association and Francois. we have always remembered a strength of his vision, his piety and a frank affability he extended to me. In fact, he was one of a initial to commend a energy of Japanese companies on his own.

Many years later, we was reunited with him during Renault. He asked how we was doing, and we told him we was well. He quiescent in 1999, and Edouard, as expected, took his place. Francois Michelin upheld divided in 2015 during a age of 88. There is a lot of him in me.

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Chapter 3 will be combined on Wednesday, Feb 1

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