A Rock Star Is Reborn

It's seven minutes to showtime and Carlos Ghosn is backstage and ready to roll. A translucent angel-hair microphone descends along his right cheek from beneath his carefully coiffed hair. His makeup is perfect, having been applied moments before by his personal makeup artist. ("Do you like strawberry?" she asks, as she applies lip gloss.) He's outfitted in a slimly tailored chocolate pin-striped suit designed especially for him by Louis Vuitton. Standing in the wings, he peers out at the audience. "That's a good crowd," he says, "but it's nothing like Tokyo. That crowd was spectacular." Suddenly, the music swells and the lights come up. He takes a pull from his water bottle, kicks the floor like a bull getting ready to charge and strides onstage to unveil a new fat-backed sports car at the LA Auto Show. Just before he goes on, the CEO of Nissan and Renault confides: "This is the fun part."

Until lately, though, it hasn't been that much fun for the man once hailed as the auto industry's rock-star CEO. Back when he rescued a nearly bankrupt Nissan in 2000, Ghosn was so revered he became the subject of a superhero comic book in Japan. Bill Ford tried to hire him to fix his family firm, and last year General Motors' largest shareholder sought to engineer a marriage with Ghosn's Franco-Japanese auto alliance to create a global car colossus with vast economies of scale. But after GM chairman Rick Wagoner decided he'd rather go it alone and rebuffed Ghosn, things took a turn for the worse. With few new models in the showroom, Nissan's sales slid and Ghosn (rhymes with phone) missed his profit goals for the first time.

Suddenly, the auto industry's renaissance man—born in Brazil, reared in Lebanon, schooled in Paris—appeared human. So earlier this year he hunkered down, stopped going to auto shows and declared a "performance crisis" at his company. He lit a fire under his designers to accelerate development of new models that are good on gas and easy on the eye. And he unsheathed the cost-cutting knife that made him famous as "Le Cost Killer," slashing 1,500 jobs. Still, with Nissan's stock free-falling, analysts who once were Ghosn groupies turned on him, concluding that one man simply could not run two car companies 9,700km apart. "The glory days," one wrote, "are long gone."

Now, though, the rock star is attempting a comeback. With new hit models like the gas-sipping Versa subcompact and Rouge small sports wagon, Nissan's U.S. sales (which generate 60 percent of its profits) are climbing again, up 6.1 percent last month, while the overall auto market fell 1.6 percent. And profits are back in Ghosn's golden range, with operating earnings hitting $3.1 billion in the three months ending in September, up 5.3 percent. Ever confident, Ghosn now claims that Nissan never really blew a tire. His crisis call to arms, he says, was just a bit of executive theater to rally the troops. "People are talking about the turnaround and it's a joke," he says. "The turnaround took place in 1999–2000."

That's when Ghosn came to personify Nissan-Renault, a rare happy automotive marriage. This year Daimler dumped Chrysler and Ford is now splitting with Jaguar. But Nissan-Renault hangs together because neither owns the other outright. Rather, they share stock in each other and jointly develop cars and factories. The arrangement, which gives each autonomy while saving billions by sharing costs, generates some of the industry's biggest profits. Still, Detroit dismisses the idea of joining Ghosn. "Absolutely not," says Ford CEO Allan Mulally. "Any kind of link-up would be a distraction."

Ghosn is still intent on adding an American automaker to complete his global alliance. "Carlos is remarkable; he reminds me of Andy Grove, one of the founders of Intel," says ex-GM director Jerry York, who tried in vain to play matchmaker between Ghosn and GM. "He truly believes you always have to run scared." Ghosn is convinced the cost of engineering high-tech green cars will eventually push a Detroit automaker into his arms. "At some point," he says, "one of them will come to the conclusion that it's better to be with somebody than to be alone."