Economy

Carlos Ghosn: The Extraordinary Fate Of A Boss Outside The Box

A path through Lebanon, Brazil and France, the former top Michelin manager may have met the end of the road in Japan.

Ghosn for good
Ghosn for good
David Barroux

PARIS — This time, it's unlikely that Carlos Ghosn will make it out unscathed. For the first time in his career, the man who has orchestrated the formation of the world's largest automobile group — bringing together Renault, Nissan and Mitsubishi into one alliance — is experiencing a resounding setback and appears to be on the verge of being ousted from the presidency of the Japanese group he'd brought back to life.

He who survived the Chinese spying scandal at Renault, who was saved by slight-of-hand regarding quality control issues in Nissan's Japanese plants and who managed to win the power struggle with the French state, the majority shareholder, over his salary, now risks losing everything. Because after ceding the presidency of Nissan, his continued leadership of Renault — and therefore the entire alliance — seems to be extremely jeopardized.

Sent to Japan in 1999 by Renault to try to save Nissan, after the French group had become its major shareholder, Carlos Ghosn was then a relatively unknown man. He had spent most of his career at Michelin, and had then arrived as number two and potential successor to Louis Schweitzer at the head of Renault in 1996, and was then known only to the small auto-manufacturing community. Renault employees — as well as French and Belgian politicians — had just had the opportunity to run up against this rigorous manager, who had not hesitated to tackle sensitive issues. Following an audit conducted by his teams at Renault, he sparked upheaval by deciding in 1997 to close the plant in the Belgian town of Vilvoorde.

In barely twenty-four months in Japan, this Brazilian of Lebanese origin who came to France as a teen, found himself for the first time at the head of a company and was going to prove all the skeptics wrong. Other automakers did not believe in the potential for Nissan to rebound, and Japanese insiders doubted that a foreigner could, for the first time in the history of capitalist Japan, succeed in leading and rectifying a company as symbolic and important as this underdog rival of Toyota.

The "samurai" returned to France in 2005.

The methods of the former student at France's elite polytechnic university would wind up working miracles. Dubbed the "cost killer," Ghosn never veered from his rather simple and straightforward method: identify problems, propose solutions, commit to results. While Nissan had refused for years to look the truth in the face, this was an executive who spoke directly and unequivocally: closure of factories, forced retirement of 21,000 employees (a first in the country of jobs-for-life), massive sell-offs of non-strategic subsidiaries, relaunching of production plans, pioneering bets on China. Though he began only as Nissan's number two, Ghosn declared that he would step down if he didn't achieve the goals he had set for the group in terms of profit and revenue.

The Ghosn method worked magic, and it helped Nissan's recovery so much that the "samurai" returned to France in 2005 to take over management of Renault. Arriving at the head of a manufacturer that was still "too French" and too dependent on certain models like the Scenic, Ghosn was not helped by the situation: The company was about to face one of the most serious crises of the automobile industry, starting in 2008.

At a Nissan plant in Yokosuka, Japan — Photo: Junko Kimura/Jana Press/ZUMA

His plans took longer to materialize at Renault, but his efforts eventually paid off. The new designer — Laurens van den Acker, from the Netherlands — gave a fresh look to the product line, including the Dacia, and particularly the Duster, which became Renault's best-selling vehicle. Even though the gamble was slow to pay dividends and the French were late to get into China, the internationalization of Renault made the manufacturer less and less dependent on the French market.

By 2016, with Nissan and Renault having recovered, the duo made a bet to buy up shares in Mitsubishi Motors, which was then in the middle of a crisis. Even if he didn't take operational control of Mitsubishi, Ghosn sent a close friend, who used his methodology to revive the manufacturer known for its 4x4.

Ghosn has also had complicated relations with the French state.

The successes of Carlos Ghosn are undeniable, but he has also always faced harsh criticisms. Some blame him for having ridden on the coattails of the bets of Louis Schweitzer (buyouts of Nissan and Dacia for example). Others for having invested in electric vehicles, which may seem visionary but has not yet proven to be profitable.

Still, more people focus on his own personal compensation and brash management style. Paid at the same time by both Renault and Nissan, Carlos Ghosn certainly was making more than 10 million euros a year, which puts him in the ranking with the CEOs of the largest car manufacturers, but he also earns more than most French and Japanese CEOs. The state-majority shareholder of Renault voted against his salary in its 2016 general assembly, but supported by his board, Ghosn managed to maintain his pay. He appeased critics by revising certain elements of his earnings, but the controversy damaged his image.

At the heart of the alliance, Ghosn has also had complicated relations with the French state, which regularly accuses him of concentrating too much power and of not having sufficiently prepared for his succession. This all-powerful boss, who had in his turn reproached the state for wanting to run the group — of which it is only one shareholder among many — had nevertheless made the development of the alliance his latest priority. The current crisis, it seems, won't give him time to read (or write) the last chapter of this adventure in industrial capitalism.

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Society

The Food Truck, A Sign That The White And Wealthy Are Moving In

In San Diego, California, a researcher tracked how in the city's low-income neighborhoods that have traditionally lacked dining options, when interesting eateries arrive the gentrification of white, affluent and college-educated people has begun.

Balboa Park Spring Fling Food Truck festival

San Diego Food Trucks via Facebook
Pascale Joassart-Marcelli

SAN DIEGO — Everybody, it seems, welcomes the arrival of new restaurants, cafés, food trucks and farmers markets.

What could be the downside of fresh veggies, homemade empanadas and a pop-up restaurant specializing in banh mis?

But when they appear in unexpected places – think inner-city areas populated by immigrants – they're often the first salvo in a broader effort to rebrand and remake the community. As a result, these neighborhoods can quickly become unaffordable and unrecognizable to longtime residents.

An appetite for gentrification

I live in San Diego, where I teach courses on urban and food geographies and conduct research on the relationship between food and ethnicity in urban contexts.

In recent years, I started to notice a pattern playing out in the city's low-income neighborhoods that have traditionally lacked food options. More ethnic restaurants, street vendors, community gardens and farmers markets were cropping up. These, in turn, spurred growing numbers of white, affluent and college-educated people to venture into areas they had long avoided.

This observation inspired me to write a book, titled The $16 Taco, about how food – including what's seen as "ethnic," "authentic" or "alternative" – often serves as a spearhead for gentrification.

Take City Heights, a large multi-ethnic San Diego neighborhood where successive waves of refugees from places as far away as Vietnam and Somalia have resettled. In 2016, a dusty vacant lot on the busiest boulevard was converted into an outdoor international marketplace called Fair@44. There, food vendors gather in semi-permanent stalls to sell pupusas, lechon (roasted pig), single-sourced cold-brewed coffee, cupcakes and tamarind raspado (crushed ice) to neighborhood residents, along with tourists and visitors from other parts of the city.

Informal street vendors are casualties.

A public-private partnership called the City Heights Community Development Corporation, together with several nonprofits, launched the initiative to increase "access to healthy and culturally appropriate food" and serve as "a business incubator for local micro-entrepreneurs," including immigrants and refugees who live in the neighborhood.

On paper, this all sounds great.

But just a few blocks outside the gates, informal street vendors – who have long sold goods such as fruit, tamales and ice cream to residents who can't easily access supermarkets – now face heightened harassment. They've become causalities in a citywide crackdown on sidewalk vending spurred by complaints from business owners and residents in more affluent areas.

This isn't just happening in San Diego. The same tensions have been playing out in rapidly gentrifying areas like Los Angeles' Boyle Heights neighborhood, Chicago's Pilsen neighborhood, New York's Queens borough and East Austin, Texas.

In all of these places, because "ethnic," "authentic" and "exotic" foods are seen as cultural assets, they've become magnets for development.

Food vendor at outdoor international marketplace called Fair@44.

Fairat44 via Instagram

A call for food justice

Cities and neighborhoods have long sought to attract educated and affluent residents – people whom sociologist Richard Florida dubbed "the creative class." The thinking goes that these newcomers will spend their dollars and presumably contribute to economic growth and job creation.

Food, it seems, has become the perfect lure.

It's uncontroversial and has broad appeal. It taps into the American Dream and appeals to the multicultural values of many educated, wealthy foodies. Small food businesses, with their relatively low cost of entry, have been a cornerstone of ethnic entrepreneurship in American cities. And initiatives like farmers markets and street fairs don't require much in the way of public investment; instead, they rely on entrepreneurs and community-based organizations to do the heavy lifting.

In City Heights, the Community Development Corporation hosted its first annual City Heights Street Food Festival in 2019 to "get people together around table and food stalls to celebrate another year of community building." Other recent events have included African Restaurant Week, Dia de Los Muertos, New Year Lunar Festival, Soul Food Fest and Brazilian Carnival, all of which rely on food and drink to attract visitors and support local businesses.

Meanwhile, initiatives such as the New Roots Community Farm and the City Heights Farmers' Market have been launched by nonprofits with philanthropic support in the name of "food justice," with the goal of reducing racial disparities in access to healthy food and empowering residents – projects that are particularly appealing to highly educated people who value diversity and democracy.

Upending an existing foodscape

In media coverage of changing foodscapes in low-income neighborhoods like City Heights, you'll rarely find any complaints.

San Diego Magazine's neighborhood guide for City Heights, for example, emphasizes its "claim to authentic international eats, along with live music venues, craft beer, coffee, and outdoor fun." It recommends several ethnic restaurants and warns readers not to be fooled by appearances.

Longtime residents find themselves forced to compete against the "urban food machine"

But that doesn't mean objections don't exist.

Many longtime residents and small-business owners – mostly people of color and immigrants – have, for decades, lived, worked and struggled to feed their families in these neighborhoods. To do so, they've run convenience stores, opened ethnic restaurants, sold food in parks and alleys and created spaces to grow their own food.

All represent strategies to meet community needs in a place mostly ignored by mainstream retailers.

So what happens when new competitors come to town?

Food vendor at outdoor international marketplace called Fair@44.

Fairat44 via Instagram

Starting at a disadvantage

As I document in my book, these ethnic food businesses, because of a lack of financial and technical support, often struggle to compete with new enterprises that feature fresh façades, celebrity chefs, flashy marketing, bogus claims of authenticity and disproportionate media attention. Furthermore, following the arrival of more-affluent residents, existing ones find it increasingly difficult to stay.

My analysis of real estate ads for properties listed in City Heights and other gentrifying San Diego neighborhoods found that access to restaurants, cafés, farmers markets and outdoor dining is a common selling point. The listings I studied from 2019 often enticed potential buyers with lines like "shop at the local farmers' market," "join food truck festivals" and "participate in community food drives!"

San Diego Magazine's home buyer guide for the same year identified City Heights as an "up-and-coming neighborhood," attributing its appeal to its diverse population and eclectic "culinary landscape," including several restaurants and Fair@44.

When I see that City Heights' home prices rose 58% over the past three years, I'm not surprised.

Going up against the urban food machine

Longtime residents find themselves forced to compete against what I call the "urban food machine," a play on sociologist Harvey Molotch's "urban growth machine" – a term he coined more than 50 years ago to explain how cities were being shaped by a loose coalition of powerful elites who sought to profit off urban growth.

I argue that investors and developers use food as a tool for achieving the same ends.

When their work is done, what's left is a rather insipid and tasteless neighborhood, where foodscapes become more of a marketable mishmash of cultures than an ethnic enclave that's evolved organically to meet the needs of residents. The distinctions of time and place start to blur: An "ethnic food district" in San Diego looks no different than one in Chicago or Austin.

Meanwhile, the routines and rhythms of everyday life have changed so much that longtime residents no longer feel like they belong. Their stories and culture reduced to a selling point, they're forced to either recede to the shadows or leave altogether.

It's hard to see how that's a form of inclusion or empowerment.The Conversation

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Pascale Joassart-Marcelli is a Professor of Geography and Director, Urban Studies and Food Studies Programs at San Diego State University

This article is republished from The Conversation under a Creative Commons license. Read the original article.


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