Rebirth Of The Z

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Ironically, that began to change just before Ghosn arrived, when designers at the company's U.S. studio came up with the XTerra, the rugged SUV that has become the flagship for American echo boomers on the go, as well as many other of the 22 new models, which would probably never have made it to the showroom. The new Z, not surprisingly, also originated at the company's La Jolla, Calif., studio.

But the Z would not have made it this far had it not been for Shiro Nakamura, the renegade design chief Ghosn hired away from Isuzu in 1999. For the past 18 months, Nakamura, a multilingual artist with global experience, has been leading the most complex phase of Ghosn's transformation--reinventing Nissan's "brand dna." To begin, Nakamura convinced Ghosn that if Nissan was to succeed, his designers had to have authority over the engineers, and the company had to go back to its inventive roots. The re-evaluation that followed led not only to a fresh design approach but to a new logo as well, to be unveiled this week.

The new sports car, wrapped around a 260-h.p. engine and to be priced at a mere $30,000 when it hits showrooms next year, is an expression of what Nakamura thinks the brand ought to be: affordable, with a little more risk and a lot more pizazz. Says Nakamura: "We simply didn't have a clear direction before."

The task now is to have Nakamura's creative sense infuse an entire generation of cars, not just one sexy sport model. Sports cars are great symbols, but they don't make for great profits. "The success of the Z rests on whether it will drum up interest for the new models they expect to introduce over the next three years," says Rex Parker, vice president at AutoPacific, an industry consultancy.

Make no mistake: there are still some real questions about whether Ghosn's reforms are sustainable. Morale is still low in many parts of the company, particularly among the white-collar managers who by now know their days are numbered. Ghosn must further reduce the number of Nissan's suppliers and cut purchasing costs an additional 10% by next year. A global economic slowdown could erase an awful lot of profit in the meantime and total Ghosn effort.

One thing, however, is certain: Ghosn won't let his troops quit on him. His relentless energy keeps his managers focused, if exhausted. For the rest of the company, he uses intermittent whistle-stop tours of factories and dealerships to keep driving home his gospel of "change...or else." As Ghosn commented to dealer-manager Yamano recently through his ever-present interpreter (he is diligent about his weekly Japanese lessons, but Ghosn depends on interpreters), "Your results show a loss. We want to know first, why? And second, what are you going to do about it?"

Too bad for Yamano. His stammering attempt at an answer prompted only an irritated sigh. "This is your responsibility," snapped Ghosn. "Brainstorm. Discuss. You will be held accountable for this."

Indeed. Accountability is the watchword at a company that two years ago nearly failed for lack of it. And while this week's auto-show debut may offer an uplifting break in an otherwise grindingly difficult quest, Ghosn doesn't have time to stop and savor success. "If you're coming from hell," he says, "then purgatory doesn't look too bad." If the Z takes off, then at least maybe Ghosn can start thinking about heaven.

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