Blog: Dave LeggettGhosn sets a challenge and a half

Dave Leggett | 10 February 2006

Yesterday was not short on variety for me. It was an early start to join the slightly forlorn and freezing multitudes queuing for visas outside the US embassy in London. I need a visa for an upcoming trip to BMW’s Spartanburg plant – filling in the green visa waiver form on the plane isn’t an option for this particular trip. At least the visa will last five years.

After a few tedious hours spent queuing and waiting around at the US embassy I had quite a list of people to meet up with including Martin Hayes at Automotive PR’s new offices (same building different floor). Always good to catch up with Martin but we missed out on our usual post-meeting beer as we’d had to bring the meeting forward because I was due at CNN and the time they wanted me was a moving target (TV people have fairly fluid schedules).

Anyway, I eventually did the CNN interview late afternoon on the subject of Renault and more specifically Ghosn’s strategy announced yesterday. I’d boned up on the main points during the day. Grow to profit rather than shrink to fit sums it up. I think I got the basic point across that it looks very ambitious but I always seem to come out of the studio thinking that I wish I could have said X or made point Y, or been crisper with fewer hesitations or ums and ers. If you caught me on World Business (I think that is what the programme is called – airs on CNN International, not the US CNN) being interviewed by anchor Charles Hodson, I hope I was halfway intelligible.

Can’t bear to watch myself on the gogglebox, actually. And I think I might be in need of a haircut. At least these occasional appearances keep my kids amused (they are brutal critics).

If Ghosn pulls off that operating margin growth target (3.2% in 2005 grows to 6% by 2009) and all those higher margin new products come out and are successful, he will surely be admitted to the Magic Circle. But there isn’t much by way of new product coming in 2006. These models will cost a bit to develop even if there are procurement and platform sharing savings via Nissan. The fruits of Ghosn’s strategy don’t start to appear until well into 2007 and, if successful (a big if), the positive impact on the bottom line is felt in 2008. Can Renault wait that long? Will some restructuring be necessary anyway?

FRANCE: Renault wants to be top European earner


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