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cross Antarctica on foot in temperatures of minus 90 degrees | :00:01. | :00:11. | |
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Celsius. Now it's time for HARDtalk. | :00:16. | :00:19. | |
HARDtalk is in Paris, headquarters of one of the world's biggest | :00:19. | :00:22. | |
carmakers, Renault, long regarded as a jewel in the crown of French | :00:22. | :00:32. | |
:00:32. | :00:35. | ||
industry. But a jewell that has lost much of its lustre. Despite | :00:35. | :00:37. | |
joining forces with the Japanese giant Nissan, Renault has seen | :00:37. | :00:40. | |
sales and profits slump which is making the French government | :00:40. | :00:44. | |
nervous. Carlos Ghosn is the CEO of Renault and Nissan. He turned | :00:44. | :00:54. | |
:00:54. | :01:14. | ||
Nissan's fortunes around but can he do the same for Renault? | :01:14. | :01:20. | |
Carlos Ghosn, welcome to HARDtalk. Thank you. Right now, Renault | :01:20. | :01:25. | |
appears to be running on empty, the business is not performing well, | :01:25. | :01:35. | |
:01:35. | :01:38. | ||
why? Any business in Europe is not having the business go well. I | :01:38. | :01:44. | |
think Renault, if you take market share, if you take volume of sales, | :01:44. | :01:50. | |
yes, the performance is not good, it should be much better next year. | :01:50. | :01:55. | |
We will have new products that will help us regain market share. In | :01:55. | :02:02. | |
financial terms, I think we are not doing much better than the | :02:02. | :02:08. | |
competitors. I would say it is a mixed picture of resistance on | :02:08. | :02:16. | |
sales because of an older line-up which were changed in 2013. Reggae | :02:16. | :02:25. | |
in the balance sheet and in the profit results. When Europe is in | :02:25. | :02:31. | |
trouble, Renault, of necessity, is also in trouble. You are so tied to | :02:31. | :02:36. | |
the European economy. To see the impact of Europe on car | :02:36. | :02:39. | |
manufacturing, you should see the footprint of car manufacturing in | :02:39. | :02:49. | |
Europe. In the case of Renault, this percentage is 50%. 25% in | :02:49. | :02:54. | |
France. This is a footprint that is not to your advantage. The European | :02:54. | :03:04. | |
:03:04. | :03:07. | ||
market is sinking, minus eight -- 8%. You need to be sure that you | :03:07. | :03:13. | |
are going to be crossing this period with a good balance sheet, | :03:13. | :03:19. | |
with a positive cash flow and positive results. Don't you need to | :03:19. | :03:24. | |
be sure, in a strategic sense, you are shifting away from this | :03:24. | :03:30. | |
alliance upon European markets? The message is that Renault has been | :03:30. | :03:35. | |
too reliant on its core, traditional European market. When | :03:35. | :03:39. | |
we launched the winter plan two years ago, we said we were shifting | :03:40. | :03:45. | |
away from Europe. It does not mean we are abandoning Europe, we have | :03:45. | :03:52. | |
the ambition to stay the second largest brand in Europe. We are | :03:52. | :03:56. | |
going to be acting in a very effective way with a lot of | :03:56. | :04:01. | |
products coming. At the same time, we recognise the weakness on | :04:01. | :04:08. | |
depending 50% on any market. Not only Europe. The same with Nissan | :04:08. | :04:15. | |
depending too much and Japan. Much of your investments and strategy is | :04:16. | :04:23. | |
about developing in other markets. Just to stick with Europe. What is | :04:23. | :04:27. | |
striking, at Renault you are performing so much worse than your | :04:27. | :04:31. | |
competitors in Germany. Sales across the French and European | :04:31. | :04:36. | |
markets are down quite significantly, you look at BMW, | :04:36. | :04:41. | |
Mercedes, they are looking at increases. They are doing well. Is | :04:41. | :04:50. | |
this really a story about a leading business exhibiting all the | :04:50. | :04:57. | |
problems that France generally has, becoming increasingly uncompetitive | :04:57. | :05:02. | |
with Germany. I do not think you can extrapolate to this level. I | :05:02. | :05:09. | |
cannot talk about my competitors. We are looking only at sales. Here | :05:09. | :05:16. | |
are just summarising... I am looking at productivity and | :05:16. | :05:21. | |
economic efficiency. You should take a look at the economic profit, | :05:21. | :05:28. | |
the cash flow, these are the most significant indicators for us. At | :05:28. | :05:32. | |
the end of the year everyone will publish their results, then you'll | :05:32. | :05:37. | |
have a good opinion. We have a specific, difficult point, the | :05:37. | :05:42. | |
renewal of our product line. When you find yourself in this | :05:42. | :05:48. | |
particular week point, about to renew some major cars inAt, you | :05:48. | :05:56. | |
have a seasonal decrees of their market share, it does not mean that | :05:56. | :06:01. | |
will be much more competitive, but there is an automatic translation. | :06:01. | :06:05. | |
This is not to say there is no problem, we have a problem in | :06:05. | :06:11. | |
Europe. This is not a Renault problem. In the end, aren't we | :06:11. | :06:15. | |
looking at a fundamental problem for your company and France as a | :06:16. | :06:20. | |
country, which is about the need to restructure, to make labour markets | :06:20. | :06:28. | |
more efficient, to make workers more productive, to close down some | :06:28. | :06:31. | |
of the overcapacity in the business sector? Isn't that what you need to | :06:31. | :06:37. | |
be doing now? If you are talking about Renault specifically, Renault | :06:37. | :06:43. | |
do not need restructuring. Renault needs to gain competitiveness in | :06:43. | :06:49. | |
France. How to do that? Many things depend on the government, which the | :06:49. | :06:54. | |
government has already announced their intention to increase | :06:54. | :06:56. | |
flexibility, increase competitiveness with some specific | :06:56. | :07:03. | |
measures. We are happy we are not talking about it, but acting on it. | :07:04. | :07:08. | |
We have competitiveness that we have to do as a car company by | :07:08. | :07:14. | |
negotiating internally with our unions, that is taking place now. | :07:14. | :07:19. | |
That is allowing Renault in France to be more competitive. It is not | :07:19. | :07:25. | |
just about government and company, it is a combination of both. This | :07:25. | :07:34. | |
is the nub of the issue. In France it is extraordinarily difficult to | :07:34. | :07:38. | |
tell the unions to change. We have seen her show try and close down | :07:38. | :07:48. | |
one of its big plant. -- Peugeot. It has caused huge political | :07:48. | :07:52. | |
controversy. Will you say to the unions, the French government, you | :07:52. | :07:57. | |
also need to shed a significant whatever | :07:57. | :08:02. | |
whatever is needed by the company. I am not going to do it if it is | :08:02. | :08:07. | |
not needed. Coming back to your questions, you need to shed this | :08:07. | :08:14. | |
and that, you cannot put the same menu for car manufacturers. Every | :08:15. | :08:20. | |
car manufacturer has different problems to face. Our problems go | :08:20. | :08:25. | |
through negotiations with unions. We should come to a conclusion in | :08:25. | :08:31. | |
January. Will the work force be slimmed down? We are in the middle | :08:31. | :08:37. | |
of a negotiation, I cannot tell you the conclusion. We are going to | :08:37. | :08:42. | |
gain competitiveness. When you gain competitiveness, it means a lot of | :08:42. | :08:49. | |
things in terms of productivity, flexibility, in terms of using | :08:49. | :08:53. | |
people on different sides depending on the evolution of the market. | :08:53. | :08:58. | |
This is what I see, you talk about competitiveness, the French | :08:58. | :09:04. | |
government, which has a 15% stake in Renault, the French government | :09:04. | :09:10. | |
takes making statements like from the industry minister, who says we | :09:10. | :09:15. | |
want Renault to become more French. He is putting enormous pressure on | :09:15. | :09:21. | |
you to ramp up investment. minister of industry in any country | :09:22. | :09:29. | |
who does not say the same thing... You said, yet acknowledged that | :09:29. | :09:35. | |
Renault can produce a model 10% cheaper in Turkey than in a French | :09:35. | :09:42. | |
plan. Your message to the industry minister in Paris, why would we ran | :09:42. | :09:45. | |
up investment in France when we can make the same cars much cheaper in | :09:45. | :09:50. | |
Turkey and sell them to French people? I am glad you are running | :09:50. | :09:57. | |
for my job. We have capacities that are established. Outplayed in | :09:57. | :10:07. | |
:10:07. | :10:10. | ||
Turkey is false. -- our plant in Turkey is full. You have to | :10:10. | :10:14. | |
consider your existing capacity. Shutting down capacity has a cost, | :10:14. | :10:20. | |
it is not free. We want a balance between running in the most | :10:20. | :10:26. | |
efficient way the existing capacity in Europe, at the same time, | :10:26. | :10:29. | |
increasing capacity is in low cost markets. That allows us to have a | :10:29. | :10:34. | |
positive cashflow and results. are trying to finesse a very | :10:34. | :10:39. | |
difficult position you have with the French government. You said not | :10:39. | :10:42. | |
so long ago, you talked about the fact it is much cheaper to produce | :10:42. | :10:49. | |
the same car in Turkey. You said, Renault could disappear in its | :10:49. | :10:54. | |
current form. What did you mean when you said that? Come on, I | :10:54. | :11:01. | |
would say the same thing for Nissan or any company. It was answering a | :11:01. | :11:06. | |
question, if you are big enough nothing can happen to you, any | :11:06. | :11:12. | |
company can disappear if you are not doing the basic things to | :11:12. | :11:22. | |
:11:22. | :11:23. | ||
remain competitiveness. I want to draw one comparison. When the US | :11:23. | :11:29. | |
massive car makers, Chrysler, GM, were in trouble 3-4 years ago, the | :11:29. | :11:32. | |
whole basis of the government stepping in and bailing them out | :11:32. | :11:38. | |
was that they would have to change fundamentally. You have a close | :11:38. | :11:40. | |
relationship with the French government, they have a stake in | :11:40. | :11:46. | |
your company. The message from the French government seems to be, we | :11:46. | :11:51. | |
will support you and prop you up as long as you do not restructure. As | :11:51. | :11:56. | |
long as you keep these thousands of jobs in France, even if they do not | :11:56. | :12:03. | |
make sense any more. Let me correct you, the government did not pour | :12:03. | :12:09. | |
billions of dollars into Renault. They gave us a line with an | :12:09. | :12:15. | |
interest rate when all the banks were not giving any loans anymore. | :12:15. | :12:19. | |
This was reimbursed way before its term. I do not want to give the | :12:19. | :12:25. | |
impression that the government is pouring money into the car industry. | :12:25. | :12:28. | |
That did not happen. I do not think the kind of pressure you receive | :12:28. | :12:32. | |
from the French government is any different to what I'm feeling in | :12:32. | :12:42. | |
:12:42. | :12:44. | ||
many countries where I'm working. When the government is a | :12:44. | :12:53. | |
shareholder, it has a double voice. Speaking as the government and as a | :12:53. | :12:55. | |
shareholder. The difference between Europe and what is happening with | :12:55. | :13:02. | |
the GM and Chrysler, if you are making losses, your balance sheets | :13:03. | :13:08. | |
are twisted, now you are in trouble. When you look at the balance sheet | :13:08. | :13:18. | |
:13:18. | :13:22. | ||
Nissan performs better than Renault? It has had smaller | :13:22. | :13:29. | |
exposure. Nissan has bigger exposure to China. You said that | :13:29. | :13:32. | |
you were pleased that the government of Francois Hollande is | :13:33. | :13:36. | |
taking some measures to help business, corporate tax breaks over | :13:37. | :13:43. | |
the next three or four years. I put it to you that if you look at the | :13:43. | :13:46. | |
overall climate under Francois Hollande, think about the | :13:46. | :13:51. | |
significant tax rises, particularly for the riches French people, if | :13:51. | :13:57. | |
you look at the message he has delivered on the welfare state, on | :13:57. | :14:06. | |
employment law, on, for example, the determination to stop companies | :14:06. | :14:09. | |
from closing down inefficient plants and threatening to national | :14:09. | :14:14. | |
Wiseton, this is not a business- friendly environment. -- | :14:14. | :14:22. | |
nationalise them. Would you agree? What is important for me is the | :14:22. | :14:25. | |
Government acts on competitiveness. They must establish a competitive | :14:25. | :14:34. | |
base. Is this a business-friendly environment in France today? I am a | :14:34. | :14:38. | |
business person. I do not judge people on that basis. For the | :14:38. | :14:43. | |
moment, I am watching carefully for the competitiveness lob which has | :14:43. | :14:50. | |
been passed. I will judge on that. More than any other businessman I | :14:50. | :14:55. | |
have met, you travel the world, you call yourself a citizen of the | :14:55. | :15:04. | |
world, rather than a country, how worried you by the lack of | :15:04. | :15:08. | |
competitiveness in France and Western Europe on the whole? I am | :15:08. | :15:13. | |
worried about it as long as there is no action about it. My big | :15:13. | :15:18. | |
concern is that we have a problem, we are talking about it and we are | :15:18. | :15:25. | |
not acting on it. I feel that we're going to have an action on it so I | :15:25. | :15:30. | |
feel a little bit more reassured. This is about the Government making | :15:30. | :15:36. | |
some decisions. Companies have to make decisions. They have to make | :15:36. | :15:41. | |
specific agreements. What is good now if the situation became so | :15:41. | :15:49. | |
dramatic that everybody is keen to act. There is no room for another | :15:49. | :15:54. | |
report, another analysis, another study. We have came to the | :15:54. | :15:59. | |
conclusion that decisions are being made. Another specific point I want | :15:59. | :16:04. | |
to raise, you had one very difficult incident at this company | :16:04. | :16:07. | |
when you and other senior executives became convinced that | :16:07. | :16:11. | |
some of your colleagues had been selling confidential secrets about | :16:11. | :16:17. | |
your electric parts to outsiders. You went public with it. Three men | :16:17. | :16:22. | |
were named and shamed. It then turned out that you were completely | :16:22. | :16:31. | |
wrong. They had not been selling secrets. Officially, we re- | :16:31. | :16:35. | |
established the people and corrected what had been done. | :16:35. | :16:39. | |
was too late to correct the damage you had done to three individuals. | :16:39. | :16:45. | |
Never too late to do the right thing. It can be too late to do the | :16:45. | :16:49. | |
right thing. Maybe the right thing you should have done, frankly, is | :16:49. | :16:56. | |
resigned. These are companies, businesses, you have boards and | :16:56. | :17:03. | |
shareholders. They decide not on the function of unemotional burst | :17:03. | :17:08. | |
on an incident but the true value of the company, the value of the | :17:08. | :17:13. | |
business. Everything which happened at Renault in this unfortunate set | :17:13. | :17:18. | |
of events went in the best interest of the shareholders. You said there | :17:18. | :17:22. | |
was more trouble proof that you were 100 % sure that these guys | :17:22. | :17:28. | |
were guilty. It is a question of judgment. In the end, did you | :17:28. | :17:32. | |
exhibit such poor judgment that the faith of the staff and the public | :17:32. | :17:36. | |
in your leadership of the company was under threat? When you are | :17:36. | :17:40. | |
reliant on information coming from people that you trust, your make a | :17:40. | :17:44. | |
judgment based on that information. It was not the judgment that was | :17:44. | :17:48. | |
wrong, it was the information. That is a different story. A final | :17:48. | :17:52. | |
thought on the way in which you handled an extremely burdensome | :17:52. | :17:58. | |
corporate responsibility, you are the CEO of Renault. You are also | :17:58. | :18:04. | |
the CEO of Nissan. There is an alliance between the two. You have | :18:04. | :18:08. | |
to spend a substantial chunk of your time every year in Japan and a | :18:08. | :18:11. | |
substantial chunk in Paris as well as a substantial chunk looking | :18:11. | :18:16. | |
after global interests. Is that possible? Is this unique alliance, | :18:16. | :18:21. | |
it is not a merger but an alliance, is it in the best interests of the | :18:21. | :18:27. | |
companies? My mandate at Nissan comes at the two years to renewal. | :18:27. | :18:35. | |
My mandate at Renault comes every four years to renewal. When I was | :18:35. | :18:40. | |
elected to become the CEO of Renault, people knew when they were | :18:40. | :18:45. | |
voting that I would be taking those jobs. I was already the CEO of | :18:45. | :18:50. | |
Nissan. And as you know, I was the main artisan of the turnaround of | :18:50. | :18:54. | |
Nissan in 1999. I have been running the company for years. The | :18:54. | :19:01. | |
shareholders voted knowing. That is what intrigues me. You succeeded in | :19:01. | :19:05. | |
turning around Nissan. You have not succeeded in turning around Renault. | :19:05. | :19:10. | |
You have finally found a job that is too tough for you. Doing the two | :19:10. | :19:15. | |
at once is too tough. I don't think that you should link both. | :19:15. | :19:23. | |
cannot help it. For the last four years, you have to admit that there | :19:23. | :19:31. | |
have been enough outside events, head wins, particularly against | :19:31. | :19:35. | |
journalist car manufacturers in Europe between the crisis of 2008 | :19:35. | :19:40. | |
to the eurozone crisis to the slump in Europe. How come these guys turn | :19:40. | :19:46. | |
around Nissan? To acknowledge the performance is good. It is growing | :19:46. | :19:51. | |
well with an exceptional balance sheet. How come these guys perform | :19:51. | :19:56. | |
so well and, at the same time, having such an average | :19:57. | :20:01. | |
performance... That is what everybody is asking. It is because | :20:01. | :20:08. | |
it is tough in Europe and that is it. It is not because I am all the | :20:08. | :20:13. | |
sudden biased and I go to Japan and an excellent. Maybe you and, let's | :20:13. | :20:18. | |
be honest, it is down to you, you are the boss, units and strategic | :20:18. | :20:22. | |
errors. You have not put enough resources, when it comes to Renault | :20:22. | :20:28. | |
in particular, into China, India, other emerging markets. You are big | :20:28. | :20:32. | |
in Russia and Brazil which you have not, particularly in China, been | :20:32. | :20:37. | |
quick enough to respond to the changing world. This is one | :20:37. | :20:44. | |
interpretation of the fact. Is it true? In 2000, when Nissan into | :20:44. | :20:49. | |
China and 2002, we made the decision, I made the decision at | :20:49. | :20:55. | |
that moment with the former CEO of rare not to say, let's not going to | :20:55. | :21:00. | |
the same market. Let's divide. -- of Renault. Renault went to Russia, | :21:00. | :21:06. | |
India, Brazil. Nissan went to China. That is one of the reason is that | :21:06. | :21:10. | |
Renault was not yet in China. bottom line is that Renault, and we | :21:10. | :21:17. | |
have spoken about her French it is, it has to be much less European and | :21:17. | :21:21. | |
much more focused on all of these emerging markets. It has to work in | :21:21. | :21:27. | |
China. That is what has been done for the next development. Russia, | :21:27. | :21:33. | |
Brazil, Renault is growing there. They have announced a project in | :21:33. | :21:37. | |
China for stopped a final thought about the future and about growth. | :21:37. | :21:46. | |
-- China. You, Carlos Ghosn, have made a massive bet on electric | :21:46. | :21:52. | |
vehicles. Look at the figures. The Nissan model sells maybe 30,000 | :21:52. | :21:57. | |
worldwide. You have got a tiny fraction of 1% of the global car | :21:57. | :22:01. | |
market in electric vehicles. You were telling the world that by 2016 | :22:01. | :22:07. | |
there will be 1.5 million and that very soon after 10 %, you say, of | :22:07. | :22:12. | |
all car sales will be electric vehicles. That has to be fantasy. | :22:12. | :22:18. | |
like to be present things. I sit and 2020, 10 % of the market when | :22:18. | :22:24. | |
the car is available. It is different when there is no car. | :22:24. | :22:30. | |
country in the world it could be possible. 10 % of the market in the | :22:30. | :22:34. | |
markets where you have an offer on electric cars. That is the US, | :22:34. | :22:41. | |
China, Japan. It is excluding countries like Brazil, India. | :22:41. | :22:48. | |
said that by a 2020, 10 % of all cars and the US and China will be a | :22:48. | :22:53. | |
letter. 10 % of the market. That is what I said. When you announce an | :22:53. | :22:59. | |
innovation, the first and you have a blip in cells, you see it is a | :22:59. | :23:04. | |
mistake. That is not want to work. It is about persistence. It is | :23:04. | :23:08. | |
about continuing to enhance the product and listened to what the | :23:09. | :23:13. | |
consumers are saying. Why they are not buying it and pursuits. We will | :23:13. | :23:18. | |
continue to pursue. If you are a shareholder, there must, point are | :23:18. | :23:22. | |
you look at the evidence and say you have got it wrong. I do not | :23:22. | :23:27. | |
think we can say that. Getting this one wrong means there is no future | :23:27. | :23:30. | |
for the electric car for this industry. That is what it means. I | :23:31. | :23:35. | |
am not ready to do that. A lot of people will come to electric cars, | :23:35. | :23:40. | |
little by little. The only question is, how fast is it going to | :23:40. | :23:46. | |
increase? This is not 30 years down the road. For you, not turning back | :23:46. | :23:52. | |
on your strategy. No, no turning back. On the contrary, it is | :23:52. | :23:57. | |
sticking to it, seeing the potential, modifying the product. I | :23:57. | :24:01. | |
think the product will have new infrastructure. It is one of the | :24:01. | :24:04. | |
reasons people are not buying new electric cars, they are worried | :24:04. | :24:08. | |
about the existence of the infrastructure. They want to know | :24:08. | :24:12. | |
where they're going to be charging their car if they leave their home | :24:12. | :24:16. | |
or leave the office. We're going market by market and sold and the | :24:16. | :24:20. |