Carlos Ghosn could retire before the company’s next mid-term business plan

Article by Christian A., on June 23, 2012

Carlos Ghosn, the CEO of Nissan Motor Co., said that he could vacate the position before its next mid-term business plan starts in around five years. Spokesman Koji Okuda said that Ghosn, who is now 58, doesn’t intend to get involved in the next mid-term plan. This year, Nissan’s investor-relations officials have informed investors and analysts this year that a succession plan has been established.

This would be the last mid-term plan that Ghosn will commit to, implying that he won’t be around for the next one. Okuda added that the company would have to prepare for his leaving within a duration of five years. Whoever comes after Ghosn will have a lot to prove since he or she would be following someone who had led the company into one of the most impressive turnarounds in recent history in the automotive industry.

Ghosn, who is No. 2 when it comes to time spent as CEO of a major automaker, entered Nissan when it was on the brink of bankruptcy. Under this leadership, Nissan has become the most profitable automaker. Its current market value has reached of up to 5.73 trillion yen ($72 billion), which was recorded in 2006. Koji Endo, an auto analyst at Advanced Research Japan, said that there’s less impact when top executives resign in Japan than those overseas since Japanese automakers are “run collegially.”

But with Nissan, it’s “clearly different.” He believes that when Ghosn retires, it would mean that the company has lost a “strong decision maker.” The present business plan, which started last year and lasts until March 2017, is the fifth multiyear campaign at Nissan since he joined the company 13 years ago. The present current Power 88 plan calls for Nissan to achieve operating profit margins of 8% and to get an 8% market share throughout the world, including 10% in China. In addition, Nissan will have to produce a new model every six weeks and to cut costs by 5% annually.

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