Ghosn's Road To Nissan

Annie Dona Gimenez was nervous. Carlos Ghosn, Renault's new chief operating officer, had come to hear the young purchasing executive explain her ideas about working more closely with suppliers and factory engineers. He peppered her with questions, but after the meeting she heard nothing for three months. Then early one morning she got a call at home from her boss. Would she be one of seven up-and-comers handpicked by Ghosn to lead a team charged with revolutionizing the French carmaker?

Dona Gimenez and the other Baby Ghosns went on to help execute one of the greatest turnarounds in automotive history--and show how smart Renault chairman Louis Schweitzer was to pluck the Brazil-born Ghosn from Michelin in 1996, shortly before the automaker posted a billion-dollar loss for the year. Ghosn put an immediate squeeze on suppliers, slashing the cost of each car by some $500. He sent furious Belgians into the streets when he shut a factory in the town of Vilvoorde. And he fashioned a far-reaching $3.5 billion restructuring program that eliminated thousands of jobs and boosted productivity dramatically. According to Dona Gimenez, Ghosn's knack for concentration was a big part of the process. "You can see it in his eyes," she says. "I've never seen him lose attention for even half a minute."

Renault now has one of the highest profit margins of automakers in Europe. Not that Ghosn deserves all the credit. His arrival coincided with the advent of Renault's top-selling Scenic minivan. And he did not invent the strategy of pitting suppliers against one another. Jose Ignacio Lopez, the GM cost-cutting czar of the early 1990s who later defected to Volkswagen, pioneered that.

Educated at the elite Ecole Polytechnique, Ghosn, 45, speaks five languages and is learning Japanese. With Michelin for 18 years, he ran its business in Brazil, and was appointed CEO of Michelin North America before turning 35. There he managed the peaceful integration of newly bought rival Uniroyal/Goodrich. He showed similar sensitivity in France. But it's in Japan that his diplomatic skills--and his turnaround talents--will face their ultimate test.