Carlos Ghosn has long been one of the stars of the car industry. Shooting to fame as "le cost killer" and the saviour of Nissan in Japan, Mr Ghosn even ended up inspiring a Japanese Manga comic book character. Later, Mr Ghosn, Lebanese although born in Brazil, took the reins, too, at France's Renault, which has an alliance with Nissan. This year he is also the head of Acea, the European car industry lobby group that elects one of its members' chief executives each year to be president.
The 54-year-old's star, however, has dimmed in recent months as a series of stumbles at Renault and Nissan has raised questions about strategy and whether Mr Ghosn can continue to do both jobs. He remains, however, one of the most charismatic and outspoken managers in the industry.
In this interview as head of Acea, Mr Ghosn discusses worries over manufacturers failing, why carmakers are asking for aid but not subsidies and the crisis in eastern Europe.
Are we likely to see one or more carmakers fail in Europe soon?
Yes. We are seeing the market continue to dip and, unfortunately, from a very low level. So with probably 25 per cent lower production this year and at least 25 per cent down in sales, we are going to have a challenging year.
How many carmakers are likely to be left?
We already know which carmakers entered this crisis in a weak position, which obviously this crisis is not helping a lot. Now even strong car manufacturers are being weakened by what is taking place, so the longer it lasts the more it is a threat to the different actors of the car industry.
Should there be more action from governments and the European Commission?
We are advocating that governments should help eliminate the obstacles [to] the car industry as a whole, not [intervene] in one particular carmaker. There is an obvious one, which is financing. Money is scarce and, when it is available, it is very expensive . . . It is not about subsidies. We want long-term loans.
Is there a danger that you do not tackle one of the fundamental problems - overcapacity?
I don't think so. If we were establishing financing for all the car industry it doesn't mean all the manufacturers are going to be in good shape. Those who were already in bad shape will continue and will have to fix the problems of overcapacity, of lack of attractive products, of the lack of competitiveness. If you take a position that we should not aid the industry as such, you are jeopardising even the competitive part.
We have only seen action by national governments. Are you concerned about a return of protectionism?
That is one of the reasons why we are always going to the European Commission. We are saying: "If you do not take initiatives, you [will] leave governments in front of the problems and they are going to try and solve them themselves."
How quickly does it need to take action?
There are a lot of things happening, but frankly we need it faster, more decisive and not reactive but proactive.
When will the crisis end?
If you take into consideration the amount of money and incentives governments are putting in not only in Europe but in the US and Japan, logically and mechanically we should start to see a kind of recovery in 2010. You are forgetting a very important factor, which is a psychological one. It is not only about throwing money at the economy but putting the consumer in a position where he is ready to consume again. This part is frankly the most scary one.
How worrying is the growing crisis in eastern Europe?
It is worrying because the decline has been so abrupt and deep. We are really worried about it. We do not know how long it will take till we come back to some normalcy. The industry is taking the appropriate measures. Could we see something more radical? Factories being closed? I don't think we will see that in eastern Europe because usually they are the most cost-competitive factories in Europe. Because it is [accompanied by] the weakening of currencies it makes them even more competitive than before. You are going to see idling of plants, without any doubt.
How about in western Europe?
You may see factory closures if some car manufacturers go out of business. I don't believe in too many factory closures from existing car manufacturers because there are many ways they can shrink production [at] the site rather than closing it.
Is the situation among suppliers getting worse?
Yes. This is probably one of the most worrying parts for the industry. We are concerned about the supply base. This is a very important and fundamental part of the industry. We have to be careful that every time a measure is taken - whether financing or stimulating the market - we are also thinking about and including the suppliers.
Could we see the collapse of a big supplier? Is it a worry that it threatens manufacturers?
It is a big worry. That is why manufacturers are consulting each other every time there are some signs or bad news about a particular big supplier.
Are you worried about whether the euro can survive intact?
Probably theoretically it is a worry; practically I don't think so as the euro has brought so many advantages that it is going to take a much bigger crisis than the one we have been through to threaten what has already been gained.
Source.