This year may be remembered for Franco-German cooperation. While both countries’ leaders try to hold the Eurozone together, French car company Renault will be working with the German Mercedes-Benz to navigate an increasingly difficult global auto market.
The chief executives of both firms portray a new style of leadership that conveys multicultural, rather than ethnocentric, viewpoints. ”You’re going to see more collaboration in different geographical zones, around capacities, around platforms, around engines,” Carlos Ghosn, chief executive of Renault and Nissan (NSANY) proclaimed at the North American International Auto Show in Detroit.
Commenting on the January 9 announcement that Daimler’s Mercedes-Benz engines will be built in Tennessee by Renault alliance partner, Nissan, Daimler chief executive Dieter Zetsche explained that his company is “systematically broadening our manufacturing footprint in this important growth market.” (Zetsche could have mentioned that Mercedes has never allowed a non-Daimler, never mind a non-German, automaker to manufacture a Mercedes engine.)
It’s also a relationship born of necessity. Saddled with soaring costs for advanced technology like alternative-fuel propulsion systems as well as new plants in overseas markets, automakers increasingly are joining forces with rivals. And as break-even points rise, automakers increasingly must find new customers in emerging nations with less familiar cultures.
Both companies had been handicapped by lack of worldwide scale and product diversity. Renault’s tie-up with near-bankrupt Nissan in 1999 turned out to be a boon. Daimler’s failed merger with Chrysler, by contrast, left both weakened. A strategic alliance among Daimler, Nissan and Renault was announced in April, 2010.
Nissan, which is 44.3% owned by Renault, aims to give its Infiniti luxury franchise a lift. Daimler can inject a bit of Mercedes’s magic; but Daimler’s own luxury-car business can’t sustain the entire company for the long-term — which is the reason for collaboration with Nissan-Renault. Fortuitously, both chief executives maintain a broad, pragmatic view of the world, shaped by multi-cultural backgrounds that are rare among automotive CEOs.
Ghosn, though he carries a French passport, was born in Brazil. He was raised in south Lebanon, educated in Paris, served a stint as a tire executive in the U.S. and led the rescue of the Japanese automaker. Building and selling cars in emerging markets is a focal point of his strategy for Nissan and Renault.
Zetsche, a German citizen, spent much of his youth in Turkey and also served a significant chunk of his career in the U.S. He and Ghosn first met years ago when Zetsche, as head of Daimler’s Freightliner truck unit, visited Michelin headquarters in South Carolina to see Ghosn about tires. Unlike come German chief executives, Zetsche is warm, approachable and funny — and immediately recognizable due to a walrus mustache he’s worn since he was a teenager.
Is something more a hand for the two companies? When asked in Detroit if Daimler might increase its 3.1% equity exchange with Renault and Nissan, Zetsche replied “we have a clear understanding that these are independent companies outside of the alliance. We have no intention of a further capital linkage. We share the office and not the bedroom, and that works perfectly well.”
These two unusual top-executive management profiles are likely to become less so as global corporations are forced not simply to find customers abroad, but to integrate non-traditional talent into their leadership. Renault and Nissan already have the auto industry’s most diverse leadership, in terms of women and foreign nationals, a fact that Ghosn highlighted earlier this month in Detroit. The rest of the world’s automakers might want to pay attention.