Nissan-Renault CEO Ghosn Supports Retooling Loans
November 18, 2008
Renault-Nissan CEO Carlos Ghosn said he supports the idea of
government-backed, low-cost loans to help carmakers retool to produce more-fuel-efficient vehicles, and said Japan and Europe should offer such programs.
Ghosn, who is the keynote speaker for the opening press day of the Los Angeles auto show Wednesday, also told the Wall Street Journal that the global credit crunch hasn't eased, and he warned that Nissan's profits will likely go to "zero" in its fiscal second half. Renault's operating profit margins for 2008 will be well below earlier goals.
"We have to recognize 2009 will be one of the most challenging years for our industry and the whole economy in the last 50 years," he said.
"I don't think anybody would be expecting peak performance," Ghosn told the paper's editorial board, adding Renault and Nissan's goals are to maintain positive free cash flow. He indicated that Renault's one-time goal of 6 percent operating margins in 2009 is off the table in light of the global economic slump; it is expected to be more like 2.5 percent.
As for government loans, as Detroit automakers are seeking from the U.S. Congress this week, Ghosn drew a distinction between programs aimed at helping car makers retool for production of high-mileage cars despite the credit crunch, and programs aimed at propping up auto makers with broader "operational difficulties."
A U.S. government program to help viable companies get affordable credit to build advanced technology vehicles "makes a lot of sense at the moment where credit is not flowing normally," he said, without taking a specific stand on the loans Detroit automakers are seeking.
Ghosn told the paper he plans to push for Europe to offer a 40-billion-Euro loan program targeted at retooling, and said Japan should follow suit. "You'll see a multiplication of this in every country that cares for its car industry," he said, adding Renault and Nissan remain committed to producing electric vehicles by 2010, despite the sharp downturn in global vehicle demand.
The auto industry accounts for 10 percent of the jobs in France and Germany, and significant numbers of jobs in the U.S. and Japan, he told the Wall Street Journal. "You can't just ignore the difficulties of the industry."
The journal article did not mention whether Nissan planned to resurrect talks with Chrysler about a takeover, merger or further affiliation. Nissan withdrew from such talks when it looked like General Motors would take over Chrysler, but those efforts are off for now. Chrysler and Nissan already have some partnerships for swapping large trucks and small vehicles.
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