Career Curveballs: Embrace Long Odds & You'll Avoid Regrets - by Carlos Ghosn

I was walking the floor of the Geneva International Motor Show in March 1999 when a fellow Renault colleague tracked me down to deliver the shocking news: DaimlerChrysler had withdrawn from talks with Nissan.

We and everyone else in the global auto industry had presumed DaimlerChrysler would ally with Nissan. The German-American automaker had created its “merger of equals” to become one of the three largest automakers globally less than a year earlier.  The media portrayed the takeover as a brilliant marriage of unlimited potential.

 

It had, in fact, altered the competitive landscape. DaimlerChrysler had plenty of cash and a wide range of products. The Mercedes-Benz brand enjoyed tremendous prestige in Japan and other key markets.

 

By contrast, Renault in the late 1990s was concentrated largely in Western Europe, and its track record of expansion was less than stellar. In the late 1980s, Renault pulled out of the United States and sold off its American Motors acquisition on the cheap to Chrysler. Then, in 1993, Renault and Volvo aborted an attempted merger. 

Many within Renault were convinced the company lacked what it took to do a successful merger. Even inside Renault, the pursuit of Nissan had generated no excitement up to this point; many were involved in the discussions, but they worked with the understanding that it likely would be for naught.

 

Because we were the underdog, because the prospect of reaching a deal seemed so remote, we were completely unprepared psychologically for the news that DaimlerChrysler had pulled out.  

 

When I came back from the Geneva show, I got a call from Renault’s then-CEO Louis Schweitzer. He asked if I was ready to go to Japan.

I talked to my family. We had just moved back to France from the United States.  We had bought and restored a home and had only lived there for three months. We had never even contemplated the idea of moving to Japan, where we didn’t speak the language or understand the culture.

For me personally, the professional stakes were high; I estimated that I had a 50-50 chance of success. 

But this obviously was a once-in-a-lifetime opportunity. I had to seize it – despite the risk of failure. 

I was objective and honest with myself about the long odds.  But at the same time, I could not ignore the inner voice that said, “If you don’t do this, you’ll always regret it.”

 

With my family’s support, I accepted the offer.

 

On March 27, 1999, Louis Schweitzer and Yoshikazu Hanawa unveiled the Renault-Nissan Alliance to the international press at Nissan’s Tokyo headquarters.  Reactions ranged from disbelief to hostility. Few gave it much of a chance.

 

 

The most immediate challenge was turning Nissan around.  The situation was urgent: The company was buckling under $20 billion of debt. For most of the ‘90s, Nissan lost share and revenue in all of its markets. It was delivering a 1 percent operating profit margin. Competitors were averaging 4 percent. Return on invested capital averaged 1 percent. Competitors averaged 10 percent. In 1999, Nissan had 43 models; only four made any money.

 

We dismantled the complicated “keiretsu” supplier system, reduced headcount, restructured our manufacturing footprint, significantly reduced debt and returned to profitability within one year. We laid the foundation for an efficient company. 

At the same time, we began the long process of creating the Renault-Nissan Alliance, combining two distinctly different cultures in a way that would ensure Renault and Nissan could live and work together harmoniously and sustainably. It was important to make sure that one culture did not dominate the other; we didn’t want one company to emerge as a “winner” and the other a “loser.” 

 

Fifteen years later, much has changed in the auto industry. DaimlerChrysler broke up.  Chrysler is now controlled by Fiat after going through bankruptcy alongside General Motors. Ford has come back after shedding the companies it acquired in the consolidation craze of the 1990s.

The Renault-Nissan Alliance has become the longest lasting cross-cultural collaboration in our industry, now the world’s fourth largest car group. We sell 8.3 million cars a year, or one in 10 cars worldwide. Our headquarters are in France and Japan, and our geographic footprint is truly global; our top sales markets are China, the United States and Russia.

 

Based on an unexpected opportunity, with high odds of failure, I listened to my inner voice that said, “Do it.”  

 

When a tough or risky opportunity comes your way, are you focused only on the probability of success? Have you turned down offers because you felt you weren’t ready for them or because “the timing wasn’t right” for a difficult move? 

Listen to that inner voice. Avoid regrets. Big opportunities for growth do not come along often. Find the reasons to seize them, however overwhelming and inconvenient they may appear at first blush.