Case Assignment 3 - TUI UNIVERSITY Dean J. Keveles Module 3...

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TUI UNIVERSITY Dean J. Keveles Module 3 Case Assignment BUS401 - International Business Dr. Cyd Naig-Coloma August 30, 2011
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With massive debts, heavy losses, and a badly damaged brand, in 1999, Nissan was close to bankruptcy. European auto maker Renault also had a challenging future. So, that same year, Renault's CEO, Louis Schweitzer, decided to put up $5.4 billion to buy effective control of Nissan in order to try and save both companies. This financial move was met with much skepticism of success (Bloomberg Business Week, 2005). This deal gave Renault a 36.8% stake in Nissan, a company that has been struggling financially, and hands over effective control to the French automaker in exchange for badly needed cash. In 1996, Louis Schweitzer had hired Brazilian-born Carlos Ghosn for his No. 2 position at Renault, and shortly after the acquisition of Nissan, Schweitzer sent Ghosn to Japan to act as COO of Nissan, then President and CEO in 2001. In fact, he was leading change as the first non- Japanese president of an automaker in notoriously insular Japan (The Encyclopedia of World Biography). Carlos Ghosn, known by many nicknames, such as "le cost killer", "the destroyer", and "Mr. Fix-It", was able to not only save Renault, but Nissan as well. His cost-cutting strategies were innovative, though not loved by many who worked for these companies. How was Ghosn to manage global financial risk and save Nissan from bankruptcy? First, Ghosn realized that he had to pull Nissan away from the Japanese culturally approved concept in which stability trumped sound financial management (Bloomberg Business Week, 2005) and more towards the Western way of cutting cost and increasing productivity;
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Case Assignment 3 - TUI UNIVERSITY Dean J. Keveles Module 3...

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