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