Nissan's saviour Ghosn rejects calls to quit
June 20, 2007 - 9:05PM

Carlos Ghosn, the legendary chief executive who rescued Nissan Motor Corp, on Wednesday refused to resign and defended his record after net profits slipped for the first time under him.

"As long as I have the shareholders' trust and the employees' trust, I will remain," Ghosn said after a sometimes hostile shareholders conference here.

The globetrotting Ghosn was parachuted into Nissan in 1999 as the first foreigner to head a major Japanese company, winning over a loyal fan base by turning the firm from bankruptcy to high profits.

But he was confronted by a small-level shareholder who called on the company's onetime saviour to quit over the last earnings report.

"A failure? The result of fiscal year 2006 is one of the best results that Nissan has ever done," Ghosn told the shareholder.

Nissan's net profit fell 11.1 percent in the fiscal year to March 31, the first time the company failed to meet its targets since Ghosn's arrival.

The fall came just after Ghosn, a Brazilian-born Frenchman of Lebanese descent, took the reins in 2005 of France's Renault, which holds a controlling stake in Nissan. Ghosn has since divided his time between Japan, France and the United States.

Ghosn has talked of a "performance crisis" at Nissan and taken a series of measures in recent months, including reshuffling top management and laying off 1,150 workers in a restructuring of the commercial division in Japan. Another 1,500 positions will be eliminated at Japanese factories through voluntary retirements.

"We have to recognise our failure, to analyse it and to react," Ghosn said.

But he told the 2,100 shareholders assembled in Yokohama to put the problems in perspective.

"The problems we are facing today are very small compared to the problems we had in 1999," he said.

"The negative articles we are reading today are a piece of cake compared to those in 1999, 2000 and 2001," he said.

"Nissan is still a hugely profitable company, let's not forget about that," he said, while adding, "I understand and I share your frustration."

Ghosn has faced particular criticism from shareholders for his open scepticism about hybrid technology -- which Japanese rivals Toyota and Honda have pioneered.

Nissan announced in late 2005 that it was working on its first hybrid vehicle to meet demand, but Ghosn has insisted that the cost benefits of the cars have not been proven.

"The hybrid is still today a niche technology. It's a fact. The numbers show it," Ghosn said.

He said hybrids were pitted "head to head" in the US market against new clean diesel technologies, which Nissan is also working on.

"When you go to the market, the decisions are going to be in function of the customers' reaction to the two technologies. Frankly, it is not obvious today," Ghosn said.

Hybrid vehicles, which run on a conventional gasoline (petrol) engine combined with an electric motor, consume less fuel and are considered environment friendly, although pricy.

When Ghosn took over, Nissan was a "keiretsu," a clogged group of Japanese businesses which are closely linked and often own equity in one another.

His first revival plan called for slashing purchasing costs by 20 percent in three years, goals that were all met a year ahead of schedule.

© 2007 AFP
This story is sourced direct from an overseas news agency as an additional service to readers. Spelling follows North American usage, along with foreign currency and measurement units.