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Speed Kills

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When Schweitzer stepped down as Renault’s C.E.O. in 2005, the celebrated Ghosn was the obvious choice to replace him. Renault had lost much of its cost-cutting zeal in Ghosn’s six-year absence, but the company was marginally profitable, and there was little sense of urgency about trying to fix it. Ghosn chose to retain his chief-executive posi­tion at Nissan while running Renault—to this day, he spends half of each month in Japan and the other half in France, and keeps a separate briefcase for each of his jobs—and most managers and employees expected that Ghosn’s arrival wouldn’t mean radical upheaval. Schweitzer told the Wall Street Journal that there would be no “sudden changes in strategy.”

Yet it took only a year for the perpetually kinetic Ghosn to produce a turnaround plan for Renault that was as radical as anything he had dreamed up before. Presented at a February 2006 news conference, the campaign, called Renault Commitment 2009, would deliver “the strongest period of growth in the history of Renault,” Ghosn proclaimed. To do this, three benchmarks had to be met in a little less than four years: an operating margin of 6 percent, a redesigned sedan called the Laguna 3 that would be ranked among the top three cars in its category, and annual sales of 3.3 million vehicles (up from 2.5 million in 2005). To increase sales by that amount, the company estimated, it would have to launch 26 new or redesigned cars—an average of one every two months.

Soon after the announcement, Ghosn toured the company’s facilities, looking to shore up support for his plan, and some of the meetings turned testy. Oliv­ier Rémoleux, director of the Renault factory in Flins-sur-Seine, outside Paris, recalled a plant manager asking whether the company could realistically hope to reach Ghosn’s targets, especially with European sales slowing. “Wrong question,” Rémoleux says. “Mr. Ghosn looked at him like he was crazy. ‘It’s not a target,’ he said. ‘It’s mandatory.’ Commitment 2009 was like shock treatment to our workers.”

Ghosn’s management style might be considered a Western version of kaizen, the Japanese continuous-improvement method, in which small, incremental changes gradually make an organization more efficient. In a typical kaizen initiative, for example, the bolts required for a particular step on the assembly line are moved closer to the worker who needs them. Over time, thousands of similar moves combine to speed up production significantly. But in Ghosn’s version of kaizen, you accelerate the process first and force the workers to do whatever is necessary to keep up.

“With kaizen, you are going to be a little bit better, a little bit faster, a little bit less wasteful, but in the end you’re just overlaying a little bit of improvement on the things that you’ve always done,” Ghosn says, in the anteroom of his office overlooking the Seine. “That’s not transformation. I want to take Renault into unknown territory, which by definition means we will be stretching ourselves to go beyond little improvements into the untapped area where innovation occurs.”

Ghosn counted on the Technocentre to implement this vision. A vast 150-acre complex in the Parisian suburb of Saint-Quentin-en-Yvelines, the $725 million Technocentre is where most of Renault’s new models are born. No manufacturing happens there; instead, the facility houses 12,000 designers, engineers, technicians, and manufacturing gurus in a lablike setting designed to encourage the cross-pollination of ideas from one project to another. The campus is dominated by three buildings, all of them a silvery-white color that in sunlight takes on an antiseptic, bluish tinge, like a city in a science-fiction movie. It features gardens, waterways, and tree-lined paths, along with restaurants, retail outlets, a music room in which workers needing a break can play on company-supplied instruments, and a gym complete with a sauna and fitness classes (at noon and 5 p.m. every day). Since 2006, the Technocentre’s sole priority has been to design the more than two dozen new models that Ghosn promised as part of Commitment 2009.

Almost immediately after Ghosn’s plan was announced, conditions at the Technocentre started to deteriorate, as managers began to set unrealistic timetables. As one unnamed worker later told researchers in a government-initiated investigation into the suicides, “I leave at 6 p.m. to pick up my kids, which is an hourlong drive. I start work again at 9 p.m. and go until 11 or 12. This is every day. I have to work every weekend.” Another worker said, “Extra hours without getting anything for it is considered a mark of loyalty.”

Some Technocentre employees say they tried to reason with their supervisors, asking for leniency when they couldn’t finish tasks on time, but they were either ignored or told to stop complaining. Christophe Delaine, a Renault electrician for 19 years, says that supervisors became increasingly impatient. “They push people to do more than they’re capable of,” he says. “There’s a culture of blame in the management. It’s deliberate.”

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