This past week the Australian automotive
industry lost the skills and experience of a very capable CEO, simply because
he made the right decisions.
What this proved was that a combination of
weak management, a severe shortage of commonsense, hubris and lack of flexibility in
decision-making is costly – to all involved.
Richard Emery, up until last Friday, was
CEO of Nissan Australia He took the job in February 2014, and despite heroic
and strenuous efforts by the then interim CEO, to clear excess stock, there
were still 40,000 unsold cars sitting at Nissan’s holding yard and on dealers’
lots.
Mr. Emery undertook an urgent and stringent
review of Nissan’s Australian operations and made the pragmatic and surprising
decision to withdraw all of Nissan’s passenger cars from its catalogue, and
focus on the company’s core strength – SUVs and pickup trucks, plus two high
profit sports cars.
His experience and his innovative thinking
resulted in clearing out the old stock, trimming the company’s cost base,
creating a business plan with improved economy of scale and setting up a path
to improved profit margins, both for Nissan and its dealers.
Richard Emery’s resumé clearly underscores
his business acumen and wide range of experience (and success) in the volatile
Australian automotive market – where more than 60 different brands of cars
fight for oxygen in a crowded market.
Here’s Emery’s background, and note the
relatively long tenure in each of his former roles, which tells me he was valued
for his contributions.
CEO Nissan Australia – 3 years, 8 months
General Manager Sales (Mercedes-Benz
Australia & NZ) – 5 years, 5 months
Sales & Marketing Manager (Mitsubishi
Australia) – 6 years
Regional Sales Manager (Audi Asia Pacific)
– 2 years, 10 months
Sales & Marketing Manager (Land Rover
Australia) – 7 years
The decisions he implemented at Nissan
Australia were aimed at bringing stability, and a robust cost base for a
company, which quite frankly, has meandered confusingly for many years prior to
Richard Emery’s appointment, apparently lacking real leadership. Its actions
confused both dealers and consumers.
I had a unique window into the level of
confusion about to occur following an interview I had in 2012 with then current
CEO of Nissan Australia, American Bill Peffer – whom I have heard others describe as like a ‘lightweight suit’.
Peffer emphatically told me he saw enormous
opportunity for Nissan’s range of cars, and subsequent to that meeting I
witnessed a massive increase in numbers, and an ever-widening range. History
now tells us that many of those cars were among the thousands which were sold
off by Richard Emery’s emergency plans to stabilize Nissan Australia.
Bill Peffer was gone less than a year
later, but his decisions lingered on as the company’s costs escalated almost
out of control.
Richard Emery had outlined his plans to
Nissan’s head office in Japan earlier this year, and while one could assume it
was less than pleased with the decision to cut passenger cars, there must have
been nodding approval for Emery to go ahead.
Then in June of this year, during a visit
to Australia by Renault-Nissan-Mitsubishi Alliance superstar, Carlos Ghosn, and
a review of business plans for Nissan Australia, Richard Emery’s innovative
proposals unraveled. Not having been briefed on the shock moves before his
visit, Ghosn apparently took umbrage that Nissan’s reputation would be severely
damaged by not offering passenger cars in its Australian product line.
One can only assume that Richard Emery’s
direct reporting line in Japan chose not to apprise Carlos Ghosn of the extent
of the changes Emery charted – allowing Mr. Ghosn to discover for himself
during his Australian review meetings.
Last week, Richard Emery, a bright,
engaging, energetic and positive executive left the Company, and was replaced
overnight by a young Canadian, Stephen Lester, who had been Managing Director
of Infiniti in Canada.
It appears that all Emery’s product plans
will be undone and rewritten to reinstate passenger cars, and that leaves
Lester with the unenviable task of trying to make the new plans work; increase
market share; and incidentally, find a way for the company to make money and be
profitable.
Good luck with that then.
No-one has ever said that justice has a
role in business, but in Richard Emery’s case what makes me sad is that his intensive
cost-cutting, his plan to only offer vehicles which will sell in profitable
numbers, and his stabilization of the company will bear fruit under Lester’s
watch.
However, by the time that happens Nissan
Australia will have lost its best chance ever to remain relevant, and
profitable, in the cutthroat Australian market.
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