| Ghosn, Ghosn, Gone?? - Click HERE for Original Thread |
| Kris |
Just read this editorial. Yes, it is lenghty but I believe it is worth reading.
"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. When news of the move leaked to the LA Times in September of last year, almost everybody stopped working on anything meaningful. Of course, obviously they must have started focusing on finding new jobs! Nothing against Nashville, but Southern California is car country. Uprooting families happens all the time, but people in Southern California just view it a little bit differently. Could it be that Nissan NNA deserves all the trouble they've gotten themselves into? Word on the street is they were not honest to begin with. The morning the rumor hit the LA Times the Corporate message was; "it’s just a rumor; no decision has been made" blah, blah, blah. Perhaps it was done so hurriedly that employees would not have enough time to find other jobs and would be forced to move?
The final attrition figures are nowhere near the 43% (or so) NNA spokespeople have been repeating. Their math factors in the fact that they only planned on bringing over 900 jobs; not the 1300 (or so) who were in Gardena the day the announcement was made a year ago. The real figures are 22% retention (actually a fraction higher.) This means that almost 78% of the NNA national headquarters staff has left the company and are now working elsewhere. Even Jed Connelly said he expected about 50% to not make the move. By the way, he is gone, Jack Collins is gone, Steve Wilhite is gone and if we have to tell you who they are – well it doesn’t matter because almost anyone and everyone who was responsible for ‘Great Products’ is no longer working for Nissan nor Infiniti.
(NOTE: Jack Collins informed employees in an official announcement meeting that Jim Morton’s own study showed that, on average, companies lose 50% of their employees when moving to a new state. That figure changes to 35% retention, or 65% lost when the state being left is California. In other words, Nissan NNA KNEW they would have a near-total wipe-out on their hands of the word got out. Which begs the question, is this why they were trying to keep it under wraps as long as they could.)
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!" |
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| bob1 |
My opinion is this, buy a good reputation Japanese car like Toyota, Honda, Nissan and drive it for maybe 4 or 5 years. Take that car in for a trade or sell it on your own and you find its worth many thousands over and above a GM, Ford or Chrysler that had the same cost basis when new. That's why I think someone "doesn't get it." at the big three American car makers. When parity is achieved in that category, look for the big 3 to soar in sales. In the mean time, someone needs to address the why is that the case?
When I explained that to someone, they asked me why I thought that was happening. I said simple, I rolled down my car window as we were at a banking drive through, next to me sat a typical nondescript poorly engineered car made by one of the big 3. It was maybe 2-3 years old and it sounded like a washing machine under the hood of that car. I told my passenger to listen to the VQ in the Nissan as a comparison.
Just what is under the hood these days at GM and Ford, some 1975 revamped and outdated leftovers from the Vega? It was a disheartening experience when owning my last (big 3) car to find out the 28,000 sticker price was worth 3K in 6 years and the car was flawless showroom condition. |
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| UncaDanno |
Kris,
Welcome to the brave new world of corporate executive leadership!
The article describes the increasing attrition of higher-level/more-highly-skilled people at Nissan.
From the corporate standpoint, getting rid of people means getting rid of costs, which means increased profits. At least for the coming quarter. And what quarter is coming up? Why the last quarter of the year (read "the most important one").
Executive leadership is no longer populated by people who are genuinely enthusiastic about the company's products or services. Executives are hired by the executive board who are beholden only to the board of directors (usually themselves!) whose number two priority is to show a short-term profit in order to reap their bonuses.
The way it plays out is, the executives do whatever it takes to get some momentum going in the marketplace, get rid of either the highly-paid individuals (who are not "one of us") or a large number of the lower-paid individuals. Or a combination of both. Either way, the momentum on the market continues for a couple of months, the company makes a healthy short-term profit, and the executives all collect their bonuses.
It is irrelevant to the executives whether the personnel cuts is getting rid of the very people who are responsible for the market mometum. What is relevant is that getting rid of these people enables them to show the sacred short-term profit.
The real irony is that, these days, executives who behave this way are held in higher regard by their peers because they are able to reap the short-term profits. No matter the cost.
So there is no shortage of "opportunities" for them. And no shortage of bonuses. |
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| bob1 |
quote:
Originally posted by UncaDanno
Kris,
Welcome to the brave new world of corporate executive leadership!
Executive leadership is no longer populated by people who are genuinely enthusiastic about the company's products or services. Executives are hired by the executive board who are beholden only to the board of directors (usually themselves!) whose number two priority is to show a short-term profit in order to reap their bonuses.
Yes Una, guess what? You get it! I worked for a company that was in business for 80 years, they used to get it until the weasels took over. I told the weasels that the worst thing they could ever do at this company was to pit employee against employee with a performance based pay and bounus system. I told them that the best creative writer and not necessarily the best worker will reap the rewards and create ill will. Guess what, it did but they would not see the light. It's still, "one for all and all for me" attitude.
Instead of cutting cost buy laying off junior people, they attacked the senior crowd with threats of "retire now or you will never get medical again." "Retire now or we will make sure your wife does not get a survivor benefit." The list goes on and on as the only way the weasels know how to make a profit is to take away from the people creating the profit, the employees.
Did I mention, my former company is bankrupt now? Gee, I wonder why? |
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| Kris |
UncaDanno
unfortunately this is true. I visit a lot of companies and experience it first hand. Sad.........there is one exception though, Toyota. |
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