Carlos Ghosn's success reviving Nissan Motor Co. and his dream of merging Nissan and sibling Renault SA with a U.S. maker to form a global powerhouse have made him the E.F. Hutton of the auto business in recent years: When he talks, people are sure to listen. But auto insiders may not like what Ghosn is currently saying about the state of the market, and the direction he believes it is headed.
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Ghosn in a Wall Street Journal interview Monday said the U.S. market has been slumping for more than four years now and that the continuing decline is drastic enough that he does not believe all automakers will survive. When asked if there will be a native U.S. auto industry when all is said and done, the executive's response was grim. "Frankly, I don't know," Ghosn said. "I can tell you it's going to be very different from today. But whether there is going to be one left or two left or none left I don't know."
The dour outlook comes at a time when many in the industry, after suffering through years of restructuring, are beginning to see signs of a recovery. Each of the Big Three automakers won concessionary contracts from their workers in 2007, deals that the companies say will help bring them closer to cost parity with foreign rivals.
In some respects Ghosn's negativity is to be expected, as U.S. automakers in recent years have turned away his offers to partner and assist in their turnarounds. The executive in 2006 held very public talks with his counterpart at General Motors Corp. about a possible three-way alliance with Renault and Nissan pushed by investor Kirk Kerkorian, only to see GM instead continue on its own. Ghosn has also been mentioned repeatedly as a possible CEO or partner to Ford Motor Co., which is undergoing its own restructuring.
Still, Ghosn's experience and successes make his comments impossible to ignore. And given that the companies involved have bled through tens of billions of dollars in recent years, a certain amount of skepticism about their long-term viability seems appropriate. - Lou Whiteman
See Ghosn interview at WSJ.com
See TheDeal.com story on growing auto industry optimism
See TheDeal.com story on Renault/Nissan talks with General Motors
