The American OEM automotive business model of globalization in one country is broken and should be discarded as Renault has done in the area of design

Implications: Renault in a bold move forward has decided to centralize both the conceptualization and design of "all" of its cars in low labor cost Romania.

Renault has discovered that engineering and design costs are substantially lower in places like Romania than in France just as assembly line worker costs are.

Renault has also discovered that stylists trained in Romania can design cars not only for the Romanian market but for any market in the world including France.



Analysis: Carlos Ghosn has once again demonstrated that he is the most far sighted car maker CEO in the world. Having observed that OEM American design centers based in California add nothing much of general value other than a pleasant climate he moved his American design operations for Nissan to Tennessee so that Nissan's midwestern based manufacturing engineers could be immediately accessible and be able to be accessed by NIssan's designers.

American OEM automotive assemblers, both of them, had also tried designing their cars and catching "trends" in southern California. These design centers have since all been terminated and moved back to Detroit. This was admittedly to reduce costs, and Ghosn, at first,  fell for the "California is the world" philosophy of artists and designers just as his competitors had done.

Ghosn, however, has learned from his original mistakes do just as Japanese, Korean, and ,soon, Chinese car makers (will) have done.

Ghosn has learned that you can send French, Japanese, American, and Chinese designers to a low labor cost center where they can ply their craft while low labor cost support staff do CADCAM, build "clay" models, and analyze whether or not metal and plastics can do what the designers want them to do.

The amount of money wasted by Ford and GM opening and closing design centers in chichi places such as Orange County beach communities and London suburbs is appalling. It was entirely do to CEOs giving way to the wishes of fashionable designers, and then retreating as costs and results failed to live up, even remotely, to expectations and promises.

Famously, some (American) designers told Carlos Ghosn that they would rather be unemployed in California than making a huge salary (by local standards, in particular) in Tennessee. He graciously granted their wishes to be unemployed.

Most Renault executives in the design group like all Frenchman everywhere on earth, would rather be in Paris than anywhere else. They do not wish, however, to be unemployed in Paris. Ghosn knows therefore that they will be in a great hurry to get their Romanian colleagues up to speed.

Look for world class global cars and trucks capable of being tweaked to fit local markets and tastes to come out of the Titu, Romania, design center.

Look at the same time for Alan Mulally to close the Rodeo Drive "product placement" office of the Ford Motor Company, where a Ford cousin/nephew sips lattes with Hollywood celebrities.

I have spent a great deal of time in Romania working with a local car parts supplier just a few miles from Titu. Look for the highly educated, ambitious, and very smart Romanian engineers to leave latecomers, like GM, and no-shows, like Ford, to eat their dust.