Auto Talk: OK, Regis, Ask Nissan's Carlos Ghosn

Regis Philbin stares intently at contestants who have just answered a question on the outrageously popular Who Wants to be a Millionaire? and asks: "Confident?"

Carlos Ghosn, who wants to stop billions in red ink flowing from Nissan Motor Co. Ltd., needs no prompting: He's confident, so much so that he and his Nissan "revival" team have staked their jobs on a turnaround at Japan's No.2 automaker.

A Renault SA executive, Mr. Ghosn was named Nissan's chief operating officer after the French automaker purchased a controlling 36.8% interest in the struggling Nissan last March. His rescue plan calls for chopping 21,000 Nissan employees and closing five plants.

Mr. Ghosn tells Ward's Auto World he's focusing on rebuilding trust and yes, confidence in Nissan, and redefining the brand by adding more uniqueness and value. "Our short-term strategy is not about making profits. We're looking at long-term issues like brand identity," he says. "There'll be a minor impact on profits during the next two years." And no, Nissan won't revert to the Datsun brand, he says.

He is counting on new life for the redesigned compact Sentra, whose sales dropped 28.6% to 63,134 units in '99. He forecasts 115,000 sales of the new model during its first year on the market.

He's reminded that Sentra faces tough competition from Ford's Focus and other small cars in a market showing little gusto in recent years. "We hope to be tough guys, too," he quips. "It's a sizable market and we don't want to neglect it."

Disdaining his description as "Le Cost Cutter," Mr. Ghosn says he's simply taking steps to assure Nissan's long-term viability. However, he's taking a 20% whack out of Nissan's costs. Suppliers are targeted for 60% of the reductions because "they represent 60% of our costs," he explains. As part of that scenario, he intends to reduce Nissan's supplier ranks to 600 from 1,110 now.

He is eyeing $500 million in savings by cutting redundant Renault/Nissan operations and by avoiding costs by vehicle and component sharing. Building Renault's small Clio along with Nissan's Micra at its Aguasca-lientes, Mexico, plant is one example. He puts down speculation that those vehicles might pave the way for Renault's return to the U.S. market after a 14-year hiatus. "Those will be sold in Mexico," he says.

Engine Deal Could Lead to Future Links General Motors Corp. is no novice when it comes to V-6 engines: It makes 2.6 million of them each year. So why did GM cut a deal with Honda Motor Co. Ltd. to take some 100,000 Honda V-6s annually in exchange for about the same number of 4-cyl. diesels built by GM's Japanese affiliate, Isuzu Motors Ltd.?

The answer is each automaker gets something it needs without additional investments and to explore future collaborations. "We wanted to get closer to Honda," admits a high-ranking GM official, "and get to know them." Dispelling speculation that Honda may abandon its go-alone stance, President Hiroyuki Yoshino says the tie-up actually "will strengthen our ability to maintain this course." GM will get a Honda ultra low emission vehicle (ULEV) V-6 whose displacement is yet to be re-vealed. Honda will get Isuzu's 2L turbodiesels produced in Poland for its Civic models and a 2.2L turbodiesel version built in Germany for Accord models. GM will install the Honda V-6 in vehicles for the North American market, while the Isuzu diesels will be used in European markets. GM is cagey about where the Honda V-6s will be used. A source says "four or five vehicles" are being considered for '02 and '03 model years. Likely candidates include the new Cadillac Catera coming in '02.

The GM source says the engine deal may lead to other Honda tie-ins. This is not the first cross-supply arrangement involving U.S. and overseas automakers. Chrysler Corp. used 1.7L Volkswagen 4-bangers when it launched compact Omni and Horizon production in 1978 under a contract to purchase 300,000 units. In 1984, Ford Motor Co. purchased 3,794 BMW 2.4L, 115 hp turbodiesels for the Lincoln Mark VII and Continental. "It was horrible," a Ford senior engineer recalls. "It belched so much black smoke you couldn't even see the car."