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Ghosn in 60 minutes
Nissan chief says outlook is limited for an Ontario assembly plant, hybrid vehicles
By Michael Bettencourt
Thursday, January 15, 2004
The near-term prospects of a Nissan assembly plant or a hybrid Nissan vehicle in Canada don't look very bright, although both remain future possibilities, said Nissan Motor Co. Ltd. chief executive officer, Carlos Ghosn, last week.
Speaking at an hour-long media round table at the company's Canadian headquarters in Mississauga, Ghosn (rhymes with cone) reiterated his position that once Canadian sales reach 10 per cent of the North American total, Canada would be in a position to be studied as a potential manufacturing site. Nissan Canada just announced record sales of over 70,000 units, compared to 1.07 million in North America. But Nissan hopes to boost that North American number to 1.3 million by 2005, which would make 130,000 units the magic number for Canadian sales to trigger production consideration. Since this would represent an 86 per cent sales increase over '03 sales figures, Nissan Canada would need to repeat or even increase its 7.5 per cent record sales performance a number of times over to reach the 10 per cent figure.
Even if such sales figures are achieved and Nissan undertakes studies on possible production sites in Canada, government incentives would need to be part of the picture, said Ghosn.
"If you say you're not going to offer incentives, you're not going to get industries," said Ghosn. "Incentives are part of the game." When asked how Ontario could compete with U.S. states offering massive financial incentives, a combative Ghosn said although it might not please some people, Nissan had to make the decision based on objective financial principles. "We're not in the business of pleasing people, we're in the market to sell cars," he said.
Ghosn's adherence to sound financial principles helped him rescue Nissan from near bankruptcy in 1999 with his Nissan Revival Plan, which broke with Japanese tradition by implementing dramatic cuts to suppliers, plants and Nissan jobs around the globe. The results surprised even the most optimistic of auto industry analysts: a $5.5 billion U.S. loss in fiscal year 2000 was followed by a $2.7 billion profit in 2001.
Yet the strict adherence to these same principles means he has reservations about alternative fuel vehicles. Nissan has struck a deal with Toyota to license their hybrid technology, and while Ghosn said Nissan is studying hybrids and fuel cells, he doesn't think their future is very clear.
"It's still not a good value equation," he said, referring to current hybrid vehicles that run on both electric and gasoline power. "The way to sell them is to swallow the costs, and we don't think this is a good business proposition.
"We're doing it in the U.S. for regulatory reasons, not financial ones."
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