NYT > Job Market

Under New Management: Life After a Merger: Learning on Both Sides
KELLEY HOLLAND Sun, 24 Jun 2007 03:11:03 -0400
Managers should act promptly (and creatively) to keep the best people after a deal.
Home Front: Training for the Twists of Driving a School Bus
JOSEPH P. FRIED Sat, 23 Jun 2007 16:25:36 -0400
A program in Brooklyn helps low-income or unemployed New York City residents become bus or truck drivers.
The Boss: When Focus Leads the Way
As told to PATRICIA R. OLSEN Sun, 24 Jun 2007 03:13:22 -0400
“New Orleans defines who I am,” said Arnold Donald, chief executive of the Juvenile Diabetes Research Foundation International.

Portfolio.com: Careers

Let's Make a Deal
Thu, 28 Aug 2008 04:00:00 -0000
As president and general manager of the New York Rangers for over a decade, I had a responsibility to our ownership to negotiate effectively on almost a daily basis, whether with one of our own players or a fellow G.M. concerning a trade. The results of the hundreds of deals I conducted over that time were largely determined by how I conducted myself during the negotiations. Here are the basic principles I developed for successful negotiating. 1. Don't Commit First If you can get the other side to state their position or proposal first, you may be pleasantly surprised at what they want. At the very least, you'll get valuable insight into what they're thinking before they know what you're thinking. I once acquired a struggling player by asking the other G.M. how much of the player's salary he'd be willing to eat if we took him. Surprisingly, he was willing to pay two-thirds of the contract, and I got the player to renegotiate his contract down to that figure just for the opportunity to stay in the N.H.L. Result? He played for us all season and the other team paid his entire salary. Getting the other side to commit to a position first allows you to use their proposal as the "high-water mark." Then, if it comes to taking a middle ground, you can be closer to what you want than they are to what they want. 2. Put Your Ego Aside Negotiations are about getting a deal done, so don't try to impress the other side with your intelligence and negotiating abilities. The stronger you look, the bigger the fight you'll have on your hands. One tactic I use is to get the other side to help me during the process, asking questions that make them feel superior, such as "I'm not really sure, what do you think?" Or I might say, "I don't know the market nearly as well as you do." Ego-driven negotiators make mistakes like telling the other side that they don't have to check with anyone above them, or they don't need to check with experts before making a decision. When you put your ego aside, you retain options such as deferring a decision until you can think it through more thoroughly and consider opportunities to get something extra. You can also delay your decision until you've had a chance to check with your owner or board of directors. 3. Keep Your Eye on the Puck When Wayne Gretzky played for the Edmonton Oilers during their run of four Stanley Cups in five years in the mid-'80s, he was constantly harassed by role players, fans, and coaches, all trying to get him off his game. But No. 99 knew that the only thing that mattered was putting the puck in the net more times than the other team. Just like Gretzky, an effective negotiator needs to focus on the issues and not be distracted by the actions of others. No matter what the outcome of a single meeting or phone call, don't let the other side's moves or reactions take your eye off the puck.   One of my strategies when negotiating with agents was to make up a ridiculously low offer from my owner to lowball the agent, knowing that they'd be offended or even insulted. No matter what curses or other words came at me, I simply looked at the result, which was often a lowering of their expectations, to judge if I'd advanced toward my deal. If you react and let the other side get you upset or out of control, you'll always lose. 4. Always Make the Other Side Feel Victorious When the deal is done, always congratulate the other side. You want them to feel like they won. "Thank you, but please let me say that you did a fantastic job negotiating this deal" was a favorite phrase of mine. Even if you think the other side didn't do well, congratulate them and never gloat. The reason for this is simple: You never know when you're going to want to do another deal with that person, and you want them to feel good about you personally when you do. Be humble in a victory and you'll be sure to have more of them in the future. Neil Smith is the former president and general manager of the N.H.L.'s New York Rangers. He is currently the owner of a minor-league hockey team, the Johnstown Chiefs, serves as a consultant to the Anaheim Ducks and St. Louis Blues, and is an analyst on Versus Network, the NHL Network, SNY, and Hockey Night in Canada. Related LinksFixing a HoleIdle Chatter: C(Double)U Later?Tampa Bay Lightning Sale Deadline Looming
Peak Performer
Mon, 25 Aug 2008 02:00:00 -0000
Job Title: Ultra-high-altitude climbing guide Employers: Mountain expedition companies Salary Cap: $45,000 Number of Jobs: 20 or 30 worldwide When Guillermo "Willie" Benegas heard about the disastrous climb up K2 earlier this month that killed 11 people when an avalanche struck, he didn't spend any time second-guessing the climbers or their guides, despite having guided several expeditions up Mount Everest and neighboring peaks himself.  "It wasn't anyone's fault. Things can go wrong—and they went wrong," he says. More than anyone, Benegas says he understands that the rewards of summiting the world's highest mountains come with substantial risks. During 10 years as a guide for Mountain Madness, an adventure-travel company based in Seattle, Benegas has climbed Everest eight times and led a dozen other expeditions to peaks over 26,000 feet. In that time he's never had an accident or lost a client. People he takes to the Himalayas come from all walks of life, from company presidents to bricklayers to retired lieutenant colonels. Benegas has guided his share of C.E.O.'s, but can't name names due to the confidentiality agreements he signed. To prepare, many of those clients go through Mountain Madness' Live Your Dreams program, where they may spend several years climbing progressively higher peaks in preparation for Everest. To climb the world's highest peak, Benegas says clients need perseverance, perspective, and a pack mentality. Benegas definitely isn't in climbing for the money. Guides earn slightly less than half the $65,000 fee Mountain Madness and other outfitters charge climbers for each trip up Everest. Since weather conditions limit Himalayan expeditions to spring and fall, Benegas supplements his income by guiding treks in South America, working on ski and avalanche patrol outside his home in Salt Lake City, and from an endorsement deal with North Face, which has featured him in magazine ads. For Benegas, though, climbing is less a job and more a way of life. Born in Patagonia in South America, he and his twin brother, Damian, who works as a guide in South America, started climbing in their teens. By the time he was 20, Willie had summited Aconcagua, the highest peak in the Americas. He moved to the U.S. a year later and, through hard work and ability, established himself as an elite guide, leading his first Everest summit in 1999. EmbeddedVideo Willie and Damian Benegas climbing Nuptse, a 25,726-foot peak in the Himalayas just southwest of Mount Everest, in 2006. By now, Benegas has traveled in the Himalayas so often that he considers the handful of local Sherpas he works with extended family, and they, in turn, call him Willie Sherpa. When a 7.6-magnitude earthquake devastated the Kashmir region in 2005, Indian officials let him bring supplies to secluded mountain villages, which are off limits to Westerners for political reasons. It was due to the fact that he'd helped rescue a member of the Indian army during an ill-fated summit attempt two years before that he was permitted. With his 40th birthday approaching late this month, Benegas admits to slowing down, but not by much. When he tore a wrist ligament that put him in a cast last March, he didn't think twice about leaving a week later to lead a monthlong expedition of 10 climbers up Mount Everest. His idea of a good time is still more extreme than most, like the 100-mile endurance run in Utah's Wasatch Mountains he'll compete in over Labor Day weekend. Everest has taught Benegas to embrace extremes, a sentiment he tries to instill in his Everest clients. "It's so much more than a guy with no experience who decides to pay $65,000 to climb to the summit," he says. "Trust me, he'll suffer like he's never suffered in his life. But suffering will make him grow. Then he'll realize it's the most amazing thing he's done in his life." Related LinksAttention K Street: Opportunity KnocksFord Drives a Surprise Profit Santiago
Building a Career
Mon, 18 Aug 2008 02:00:00 -0000
Job Title: Lego artist Employers: Corporations and individuals Openings: Word of mouth Salary Cap: Six figures Number of Jobs: About 40 Lego master builders Who doesn't remember growing up playing with Legos—the small, colorful bricks that can be combined to create anything from airplanes to zebras? Most kids ultimately pack up their Legos and move on. But Nathan Sawaya never did. The 35-year-old New Yorker makes a six-figure living as a Lego artist, creating large-scale works of art using tens of thousands of the plastic pieces. Among his recent projects are a 10-foot-tall replica of the new Trump Tower being constructed in Dubai for Donald Trump, and a four-foot-tall bumblebee commissioned by Fall Out Boy bass guitarist Pete Wentz as a gift for his new bride, pop star Ashlee Simpson. He says he receives hundreds of commission inquiries every month. Though he played with Legos like most kids, they were the furthest thing from his mind when he set out in the working world. After graduating with a law degree from New York University in 1998, Sawaya became a Wall Street attorney, earning a comfortable six-figure salary—and working in a high-stress environment. To relax after long hours at the office, he would work on art projects at night, making sculptures using clay at first, then moving into more whimsical media, like candy. One of Sawaya's first hobbyist projects with Legos was an eight-foot-tall pencil. Friends would come over to gawk at it, and Sawaya eventually set up a website, brickartist.com, to post photos of his creations. Visitors to the site sent in requests, such as Lego renderings of portraits of their children. The hobby became the real thing in 2004 after he won a competition sponsored by Lego to find the best builder in the U.S. He quit his job and became one of Lego's "master model builders," creating sculptures for its theme park in San Diego. They paid him just $13 an hour, but it gave him good training for when he returned to New York to create his own Lego works full-time. Sawaya now keeps 1.5 million Lego bricks, meticulously organized by shape and color into clear bins (he buys all his Legos in bulk). He sketches his projects first on something called "brick paper"—essentially, graph paper modified for Lego shapes—and takes anywhere from a few days to a few months to build them. At any given time, he's working on three or four projects, earning anywhere from a couple thousand dollars up to six figures per work, depending on the complexity of the project and how quickly they need to be built. For his own personal fulfillment, he also creates more avant-garde works and has two traveling exhibitions of his work (here's a slideshow of some of his work). Ironically, Sawaya says he now works more hours per week than he ever did as a corporate lawyer, although he also makes more money than he did then. Most important to him, though, is the artistic gratification he gets out of his Lego creations, particularly when he gets feedback from children who are inspired by his projects. "There are 400 million children out there playing with Legos," he says. "Who am I to say that they aren't artists too?" Also on Portfolio.com Gas Prices Around the World Making Bucks on the Greenback The Denver Party CircuitRelated LinksDaily Brew: Science Shows What Harvard Students Really Think Of Rednecks360? Maybe Not.Olympics Medal Means Gold for Florida Man
Wireless Operator
Wed, 13 Aug 2008 10:00:00 -0000
Dan Hesse has perhaps the hardest job in the wireless industry right now. In December, he replaced Gary Forsee as president and C.E.O. of Sprint Nextel at one of the lowest points in the company’s history. Sprint lost more than a million customers in 2007 and posted a $30 billion loss in the fourth quarter alone. But Hesse might say that his job offers the most upside: The company is so troubled that he has license to take big chances. When he took over, he promised moves on the scale of “nukes” that would shake up the wireless business. None of his ventures so far have been quite that ambitious, but in February he introduced a single-rate plan ($99.99 a month for unlimited calls, text, and data) that may help slow the mass customer defections plaguing Sprint. Hesse also pulled together an alliance with Google, Intel, Comcast, Bright House Networks, and Time Warner Cable to launch a startup called Clearwire, which will deploy WiMax technology, a kind of WiFi on steroids. WiMax is a high-speed data network that covers a larger area than WiFi—entire cities rather than individual coffee shops. And Sprint is one of only two major carriers so far to support Google’s coming Android operating system, which will make it easier for cell phones to download software or use Web-based services from other companies. Most cell phones today are far more restricted. Hesse, 54, might look familiar from his appearance in Sprint’s television ads. (He offers his email address, which customers can use to register gripes.) He talked with Condé Nast Portfolio contributing editor Kevin Maney at Sprint’s Overland Park, Kansas, headquarters, a sprawling faux college campus that, in more ambitious days, was built for 15,000 employees but currently houses only 10,000. The following is an edited transcript of their conversation. I’m a Sprint customer, and it’s no secret that the company has just about the worst customer service on earth. How are you addressing that? Let me put it this way: It’s definitely getting better every month. We measure the hell out of it. Every meeting starts with discussing the customer experience. That said, we have a long way to go, and people have long memories. That’s part of the urgency. We know it’s going to take a while to get customers to actually perceive that service has improved. As a Sprint client, how will I notice what you’re doing? If you went into a Sprint store before and said, “I have this problem on my bill,” they’d tell you to call customer care. Not because they were being jerks—they didn’t have access to the systems to fix a problem like that. Now they do. So even the role of the stores has changed. They sell too, but their No. 1 job is to improve the customer experience.  Maybe that will stop so many people from abandoning Sprint. The company’s churn rate of ­consumer defections is roughly twice the industry average. Our bonuses—my bonus and every employee’s in the company—are based on exactly the same metric, and that’s reducing churn. We recognized that it was the biggest issue facing the company and that we had to fix it. How did it get this bad? For years, the wireless industry was growing so fast you didn’t need to care about it. You could grow your way out of anything. As results started to decline, Sprint looked to reduce costs, and one of the ways was through big cuts in care and service. It cut the number of reps answering the phone calls, and average wait times went way up. Can all that be fixed? A big reason people call customer care and tie up the service reps is because they have questions about their bill. The new flat-rate plan, Simply Every­thing, is all about reducing those. It’s the same amount every month, and customers know exactly what it’s going to be. In your career, you’ve made a habit of creating single-price, all-you-can-eat plans. You did something similar at AT&T Wireless when you worked there in the 1990s. It’s very much like Digital One Rate, AT&T’s plan from 10 years ago. That was all about saying to customers, “Anything the wireless phone can do, just don’t worry about it. Just knock yourself out.” We found that customers will actually pay a premium for simplicity, and we’re finding it also on Simply Everything. It’s not about a discount. Customers who were spending less than $99 a month upgraded to the flat-rate plan because they think it’s a better deal. It’s like walking into Costco. I wasn’t going to buy 144 rolls of toilet paper, but God, it’s a good deal. Did you have a clear picture before you took this job of how grim things were at Sprint? The problems were more significant and deeper than I had expected. I came right at the end of the fourth quarter. As soon as we announced our financial results, the stock went down to five dollars and change. It lost more than half of its value within a very short period of time. How could you not know that was coming? To a certain extent, the board didn’t realize how significant the issues were. They didn’t dupe me. I don’t think they knew either. Let’s talk about WiMax. So far, it’s getting mixed reviews about whether it’s going to work well or be a good business. One tech executive called it “WiMin” on his blog. It’s going to change the industry completely in terms of the capabilities and the applications possible in the mobile world. And it’s not just about phones anymore. It’s about embedded chips that can receive WiMax in your car, in your camera, in your video camera, and everything else. You’ll be able to download movies into the backseat while you’re driving. You can see real-time traffic. We think we have roughly a two-year head start over our competition. This is through the ­Clearwire venture? Yes. Sprint owns 51 percent of that company. The other investors are Intel and Google and the big cable companies. I think we’ll have a terrific board of directors. With all those owners, who’s actually going to end up running it? Craig McCaw, the telecom pioneer, will be a non­executive chairman. Ben Wolff, who has worked with McCaw, will be the C.E.O., and Barry West from Sprint will be the president. It won’t be a joint venture. It’ll be a separate public company once that’s approved, probably near the end of the year.  Sprint is one of the first major U.S. carriers to say that it will use Google’s Android ­operating system, which is currently in the works. What’s your relationship like with the company? Actually, we’re doing a lot with them. We’re working on Android. We’re part of the Open Handset Alliance [an industry group that is working to develop applications for Android]. We believe we’re by far the most open, if you will, of the wireless carriers. We make it very open for applications developers to write software for Sprint wireless products. The relationship with companies like Google will only help that. Since Sprint has to do something radical to reverse its fortunes, opening your network entirely could be an interesting move. Will you go all the way to that point? If we can. The more open we can be, the more we’re going to attract more applications to our platforms, which means we’ll attract more users. It’s a way of differentiating. Does that mean you’ll be like the open internet? Users could ­download anything? Customize their phones in any way? I think we’re going to be ahead of Android. You are? I’m not the expert, but there have been some delays in terms of Android. I don’t know when you’re really going to see that product released. But in this Sprint environment today you can have a variety of operating systems. You’ve got Windows Mobile, Palm, RIM’s BlackBerry. Our customers are going to have just about as much openness as they want. After you bought Nextel, its customers began fleeing. Nextel’s phones use a separate push-to-talk network called iDEN, and critics have said that Sprint should sell Nextel or spin it off. What’s your current thinking? We’re committed to making iDEN very successful, but we’re not wed to a particular business model or structure for any of our divisions. We have a bunch of new handsets on our iDEN network. We’re reinvigorating the brand, but we’re always going to keep all of our options open. How much time do you think you have to turn things around? I don’t know. All I can do is show consistent improvement, and I really can’t predict what’s going to happen. Are you committed to keeping Sprint Nextel in Kansas? Yes. Is that a handicap? Can you get a brilliant engineer out of Stanford University to come here? We’ve had absolutely no problem recruiting. Kansas City is the most difficult city in the United States to get people to leave. It’s true. You can’t get anybody to leave once they’re here because of the quality of life and affordability.   This office is pretty grand. You came from a startup, and your ­office was a lot like this, wasn’t it? Oh yeah. [Rolls his eyes.] I had an unfinished door, and my desk was a slab of wood on poles. One of the advantages of running a startup is you realize how inexpensively you can do things. You put yourself in a Sprint ­commercial. Do you think you can change people’s perceptions of this brand? A lot of people forget that the cur­­rent AT&T brand was created in 1984. It was the Bell System until the break-up, and AT&T had never been associated with any product. So we really created that from scratch. We had to describe every action in terms of either making deposits or withdrawals in the brand bank. And it became a tremendous brand. I believe we can create that at Sprint. Will we see you in any more commercials? The agency and our marketing team are suggesting I do another, so it’s quite possible. Related LinksMcCaw's Next BetWhat's Wrong With the 3-G in iPhone 3G?Sprint's WiFinale
Switch Hitter
Wed, 13 Aug 2008 10:00:00 -0000
And for tonight’s act, Peter Guber pre­sents . . . the sixth season of the Class AA Frisco RoughRiders. Yes, that Peter Guber, the movie producer behind blockbusters like Batman and Rain Man. The same Peter Guber who was booted from his job as chairman and C.E.O. of Sony Pictures Entertainment in 1994 for incurring the company’s biggest write-down ever. Since then, Guber has moved on from Hollywood to small-town America, refashioning himself as a mogul of a different kind: one who buys distressed minor-league baseball franchises and transplants them in second-tier cities looking for an economic boost. As he did at Sony, Guber has hooked up with deep-pocketed patrons, only this time around it’s local governments, which will foot the bill for pricey new stadiums. This is a standard yet perennially controversial arrangement, but it hasn’t prevented Guber from becoming one of the biggest owners of minor-league franchises today. He owns five teams, operates one, and is in the process of buying another, the Winston-Salem Warthogs. Owning minor-league teams is not as sexy as moviemaking, he admits. “But there’s a sizable bottom line if you do things right,” he says, showing the same promotional savvy that made him famous a decade and a half ago. Guber got into the minors almost by accident. After leaving Sony, he formed Mandalay Entertainment, a TV-and-film-production company (its most notable release is I Know What You Did Last Summer), and made a few bids on various major-league sports franchises, including the Oakland A’s and the N.B.A.’s Miami Heat. When those failed, Guber instead partnered with a father-son team that owned two successful minor-league franchises to form Mandalay Sports Entertainment. Today, Guber relies on his own scouts to find cities that are in the market for a team. Back in 2002, for example, Frisco, Texas, a fast-growing town north of Dallas, was eager to acquire a club. Tom Hicks, owner of the major-league Texas Rangers, wanted to bring a team to Frisco to anchor a planned real estate development. He contacted Guber, who already had multiple teams in his stable, and they reached an agreement. Frisco would pay for a $22.7 million ballpark, while Hicks and Guber would reel in a team. Their quarry: the struggling Shreveport, Louisiana, Swamp Dragons, which they snapped up for just over $4 million, renamed the RoughRiders, and exported to Texas. Now Mandalay, which bought the bulk of Hicks’ interest in 2003, pays Frisco to lease the city-owned stadium, Dr. Pepper Ballpark. Attendance at RoughRiders games has increased dramatically as players’ on-field performance has improved. The team went from last in the league in 2001 to first in 2004.  The Frisco arrangement is similar to a deal Guber struck in 1999 involving the Rockford, Illinois, Cubbies. According to a person close to the club, Guber scooped up the franchise for $4 million, renamed the team the Dragons, and forged an affiliation with the Cincinnati Reds. An intermediary introduced Mandalay to city executives in Dayton, Ohio, who offered to finance a $23 million downtown ballpark in order to entice a team to move there. As part of that deal, the city of Dayton and Montgomery County issued municipal bonds worth $18 million to pay for most of the stadium’s cost. Mandalay put in $4 million. In return, it secured a 20-year operating lease with an option for an additional 10 years. Mandalay is currently working with the city on a multiuse real estate development surrounding the park. If the deal, worth $250 million, goes through, Mandalay will be an equity partner. At the time Mandalay connected with Dayton, “baseball people thought we were crazy,” Guber says. “They said we were too close to the fan base of the Reds, that depopulated Dayton couldn’t support a team, that I was just another Hollywood guy with a silly jones for baseball.... Well, sure, I’m a fan, but this is not philanthropy for me.” Though Guber is prone to making exaggerated statements, this doesn’t appear to be one. Over the past decade, minor-league teams have become the toy of choice among wealthy businesspeople and are known for performing better financially than their major-league parents. The teams are relatively cheap, costing anywhere from $1 million to $25 million, depending on their class affiliation. There is also a built-in financial advantage, in that major-league affiliates pay minor leaguers’ salaries and injury costs. Minor-league team owners, who don’t get involved in scouting, trading players, or hiring and firing coaches, operate like movie-theater owners: Guber makes money through sponsors, ticket sales, and concessions, which can generate profit margins of 15 to 20 percent. While the rate at which team values were appreciating has recently slowed, the minor leagues retain some advantages. Major-league teams, for example, collect only 6 percent of their minor-league affiliates’ ticket sales. And minor-league owners are allowed to keep all the revenue from concessions and merchandise sales. Tonight, though, Guber’s attention is on the RoughRiders, who are taking on the Midland RockHounds at Dr. Pepper Ballpark. While the Rough­Riders go through their pregame drills, Guber, who is attending the game with his two 14-year-old sons, looks down at the crowd-pleasing Newlywed Game unfolding atop the visiting team’s dugout. The action is broadcast on the stadium’s giant outfield screen, bringing roars and howls from the crowd. Guber cheers right along. “I love this team. I love all our teams, because I love this game,” he says. Just then, the crack of the bat echoes in the stands. All heads turn—except Guber’s. He is counting the house.
Speed Kills
Wed, 13 Aug 2008 10:00:00 -0000
One night in February 2007, a technician at Renault crafted a noose in his two-bedroom apartment in the village of Saint-Cyr-l’École, outside Paris, and hanged himself. The technician left behind a wife and young son, who had gone out of town and expected him to meet them the next day. His suicide was unexpected in many ways. He had a loving relationship with his family, and his work should have been equally satisfying. The position at Renault was a dream job—he had been obsessed with cars as a youth and had worked at the company since 1992, and Renault was putting him through graduate school for engineering. His performance reviews were consistently positive, and he was on track to be promoted to engineer. But in the months before he died, the technician, Raymond D., had been sliding into an emotional abyss, largely because of pressures at work. (Under French law, the last names of suicide victims are not disclosed without the approval of family members.) The company was in the midst of a radical turnaround plan implemented by Carlos Ghosn, who had taken over as C.E.O. in 2005. As a result, the workload had steadily increased for all of Renault’s employees, particularly those at the design center where Raymond was employed. Workdays became longer and deadlines more intense. Before he killed himself, Raymond left a note on his son’s blackboard that said, among other things, “Tell Mr. Ghosn I can’t handle the pressure anymore.” (View a pop-up graphic showing notable groups of business-related suicides.) Raymond was not alone. Between October 2006 and February 2008, six employees working at the company’s design complex—a campus called the Technocentre—and one at its nearby test facility tried to kill themselves; five succeeded, three of them during a period of just four months. Particularly gruesome were the two deaths that occurred at the complex itself. It’s possible that this is just a statistical anomaly—Renault is a huge company, with more than 63,000 employees in France and 12,000 at the Technocentre alone. Peugeot Citroën, another French car manufacturer, has also experienced a handful of suicides. But some of the Renault employees who killed themselves blamed workplace pressure as the main cause. And one, Raymond, went a step further and blamed Ghosn, the man brought in to save the company. Renault, the third-largest automaker in Europe, made no immediate public comment on Raymond’s death, or on any of the others. No one from management called his widow to offer condolences. But as news of the suicides at Renault became public and experts posited that such a cluster in one facil­ity was unusual, the questions surrounding the deaths became harder for the company to ignore. Job-related suicides are particularly rare in France, where strict worker protections such as 35-hour workweeks are enforced and labor unions have ample input into plant activities. Yet the turnaround plan at Renault was extremely ambitious and involved releasing 26 new or redesigned cars in less than four years, a pace far faster than most auto companies can sustain.  “I am trying to motivate people to want to do more than they thought they could do,” says Ghosn, 54, in an interview at his office in Boulogne-Billancourt, the Paris suburb where the company is headquartered. He is short and stocky, dark-eyed, and impeccably dressed in a tailored black suit. “That’s the most important role of a manager, and that’s what I appealed to when I began the transformation at Renault. I was certain that everybody in the company would feel that they were doing something extraordinary by helping Renault achieve what we set out to accomplish.” Moments later, though, reflecting on the suicides of Raymond and his colleagues, Ghosn adds, “But if you say people’s motivation is the greatest wealth and asset of the company, scenes like these cannot be ignored.” The events at Renault raise larger questions about how far a company is able to push its workers. At a time when the global economy is sagging, most large corporations are trying to increase their productivity. This involves painful initiatives that can backfire, especially in countries with worker-friendly ­labor laws. Most restructuring efforts follow a predictable pattern: reduced budgets, layoffs among well-trained workers, and new ­operations in cheaper parts of the world. In the process, says Kaj Grichnik, a consultant at Booz & Co., manufacturers are alienating themselves from their most critical asset: their employees. “In ­exchange for working harder and harder, most manufacturers offer their workers static salaries, decreasing benefits, increasing anonymity, and abuse from middle managers,” Grichnik says. “And when workers feel that they ­are not being treated with respect, the company suffers.”  The French Ministry of Health has classified the first two deaths as workplace accidents, a category that few suicides fall under unless they are indisputably linked to job conditions. The designation ensures that the victims’ families receive life insurance payments and a pension from the government. Potentially more problematic is the fact that the company could face charges. French labor inspectors recommended to the government prosecutor in Versailles that Renault be investigated for “moral and institutional harassment of workers,” according to a source in the prosecutor’s office. At the time of the suicides, French employees could not work more than 35 hours a week; that policy has since been overturned. The prosecutor has already begun an inquiry, which will include taking depositions from the director of the Technocentre and the immediate supervisors of the suicide victims, and local police are working to determine whether employees were forced to put in longer hours than legally allowed. Authorities plan to decide in the coming months whether or not to file charges. When Carlos Ghosn became C.E.O. of Renault in 2005, he took over a company with a superb reputation for innovation but little strategic direction. For decades, its engineers designed cars that were mechanically and aesthetically different from virtually everything else on the road. It was the first car manufacturer to put turbochargers and hatchbacks into widespread production, among other innovations. However, under Ghosn’s predecessor, Louis Schweitzer, a former high-ranking official in the French government, Renault swung from one new idea to another with little apparent rationale. The company had long specialized in economical cars for the masses, but beginning in 2001, Schweitzer made an embarrassing foray into upmarket autos by introducing the Avantime, an eccentric three-door coupe-minivan, and a staid model called the Vel Satis, a luxury car that retailed for about $50,000. Neither sold well, in large part because Schweitzer had tried to enter a market that was dominated by models from companies like BMW. And during that period, while Schweitzer was distracted by the launches, the quality of Renault’s less expensive models dropped significantly. “Traditional customers began to question where the brand was going and why the cars they wanted weren’t as good as they used to be,” says Stephen Norman, Renault’s senior vice president of global marketing. It was no surprise, then, that Ghosn inherited distressing numbers. Revenue in 2005 had risen only 2 percent compared with the previous year, and Renault’s market share in Europe had dipped to less than 10 percent for the first time in years. Ghosn had seen this before, or something like it, anyway. The Brazil-born Lebanese executive had first come to Renault in 1996 as an executive vice president. Before that, Ghosn was North American C.E.O. of Michelin, a title he achieved by his late thirties, when he forged a reputation for relentlessly slashing expenses. Renault was the perfect venue for such skills. Schweitzer had set a target of trimming about $600 from the manufacturing cost of each vehicle, but when Ghosn arrived as V.P., he established a plan that would triple the projected savings. Some of his initiatives provoked strong reactions. After he closed a large Renault factory in Belgium, hundreds of workers staged work stoppages and clashed with police. Workers in France also protested, out of solidarity. Political leaders from both countries demanded that the facility remain open, but Ghosn got his way. The factory was shuttered, and by 1998, Renault’s profit margin had recovered to a healthy 5 percent. By 1999, Renault had rebounded to such an extent that it was able to rescue a competitor, Nissan, which was then nearly bankrupt. Renault paid $5 billion for 44 percent of Nissan’s stock, and Ghosn took over the top spot. He quickly restructured the company by slashing budgets and laying off workers. A year after Ghosn took over, Nissan was profitable, and within three years it was virtually debt-free. With its newly streamlined cost structure, the company pushed its operating margins to 10 percent, comparable to those of industry leaders Toyota and Honda. Ghosn had become the auto industry’s best-known high-wire act: the C.E.O. who would publicly proclaim an improbable set of goals for a company and somehow manage to achieve them. A Japanese comic-book series about his exploits, The True Story of Carlos Ghosn, became a bestseller, and business school students, without irony, compared Ghosn to famous historical figures in works like “The Change Efforts of Douglas MacArthur and Carlos Ghosn in Japan.” His press coverage could be hyperbolic; the Detroit News, for example, ran an article with the headline “Nissan C.E.O.: The Making of a Superstar.” Anytime an auto company had a down quarter or two, Ghosn was rumored to be in line to save it.  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.”  The situation came to a head one morning in October 2006, when Antonio B., a 39-year-old engineer, jumped to his death from an elevated walkway in one of the Technocentre buildings. He fell more than 30 feet onto concrete and died instantly. According to a union delegate who was nearby, people initially thought a chunk of the building had broken free. Several employees saw the body hit, as the engineer had chosen a location people routinely passed and a time, 10 a.m., when they were on break. On Antonio’s computer screen, according to Technocentre employees, was a description of a bitter argument he had just had with his manager. (Neither Renault nor the local police will confirm the contents of the note.) In that description, he said that he felt unappreciated and that no matter how hard he worked, management was never satisfied. Antonio’s death traumatized the Technocentre for weeks. One worker says, “Coming to work each day is like going to a crime scene. I can’t forget the sound of his falling body.” The elevated walkway has since been closed. Three months later, the body of Hervé T., a 44-year-old technician, was found in the artificial pond on the grounds. He had been missing for more than a day; because of the papers on his desk and the fact that his car was still in the parking lot, co-workers assumed he had to be on the campus somewhere. But the property is immense, and by the time his body was finally discovered—in a remote corner of the pond—he had been dead for 36 hours. Hervé left behind a diary of a yearlong battle he had waged against depression, including a short hospital stay to treat anxiety. He described the tension at work and the fear that he didn’t fit in at Renault anymore. “We are always working in a state of emergency,” he wrote. “This has led to a lot of negative stress. I’m afraid to make mistakes in the documentation, and since we generate the engineering data, it can have consequences for purchasing, prototype, logistics, and manufacturing.” Raymond D.’s suicide, less than three weeks later, was perhaps more disturbing, in that people who knew him well had watched him emotionally disintegrate. In October 2006—soon after joining the team producing the Laguna 3 sedan, one of the three components of Ghosn’s turnaround plan—Raymond’s wife says he told her and friends that if he didn’t complete the technical specifications for the car’s undercarriage, which was his direct area of responsibility, the car would not come out in fall 2007 as Ghosn had promised. Worse, the Sandouville plant in northern France, where the model was being built, would be closed. It’s irrational for one technician to assume responsibility for a factory full of workers, but Raymond’s wife maintains that he believed he carried the future of that facility on his shoulders and that his supervisors had encouraged him to think that way. He began to put in up to 15 hours a day on the project, breaking only to eat and sleep erratically for as few as three hours a night. “There were times,” his wife recalls, “when he would wake up at 3 in the morning, after going to sleep very late, and check if I was asleep. If I was, he would sneak out of the house and go back to work at the Technocentre.” Raymond told his brother-in-law, also a Renault worker, that he felt as though he wasn’t good enough for the job and that his supervisors didn’t think he was capable, belying his positive performance reviews. Raymond said, “Next to Carlos Ghosn, I’m nothing,” according to his brother-in-law. And when his wife suggested that he mention his concerns about the Laguna’s falling behind schedule to his supervisors, his face grew ashen. “Then I won’t get my promotion,” he told her. Though Raymond was losing his grip, his family feared that had they forced him to seek help, he would have completely withdrawn from them. So they did little more than gently try to persuade him to seek help at work. (At the time, the company had doctors on staff to counsel employees who needed emotional help, and an enhanced program has since been put in place.) His wife still lives with their young son in the home where Raymond hanged himself. She has a letter written by Raymond’s doctor saying that he had known Raymond for 15 years and that he’d never shown any signs of psychological problems. A tall, well-spoken woman originally from Sarajevo, Raymond’s wife is haunted by the stark goodbye note he left on their child’s blackboard, and the eerie reference to Ghosn. The family’s lawyer says she believes that he left such an explicit signal because he felt that the first two suicides were dismissed by Renault as flukes. “Every day I wake up in an empty bed and think about Carlos Ghosn, how he doesn’t suffer the same pain that I do,” Raymond’s wife says. “All I want is for Carlos Ghosn to say he did something wrong.” That hasn’t happened. Soon after Raymond’s death, Renault issued a statement that there was “no correlation between work conditions and the three suicides” or between the deaths and management strategy. More recently, a Renault publicist emailed Condé Nast Portfolio a response to questions about the suicides that read, “We are profoundly shaken by these events, and took prompt action to assess the situation and address specific points on which improvements could be made. This does not mean that there is a direct link between work and the suicides, the causes of which are highly complex.” The company’s stance is that the multiple deaths were a mere coincidence and, in fact, correlated closely with the annual suicide rate in France, a relatively high 20 per 100,000 people. In the U.S., by comparison, the suicide rate is only about 10 per 100,000 people.  But suicide experts say such reasoning is flawed. Broad averages can’t predict which types of individuals will commit suicide; more specific factors such as age, gender, and occupation must be considered. In France, agricultural workers between the ages of 25 and 49 have the highest suicide rate—about 61 per 100,000 people—compared with only about 12 for every 100,000 people in that age group with jobs in corporations. Given these statistics, the recent wave of three suicides in one year at the Technocentre is actually more than double the national average for its category. Of course, suicides sometimes happen in groups because of the copycat phenomenon. Yet multiple people taking their lives in the workplace is unusual, and two in the space of three months is “exceedingly rare,” says suicide expert Sally Spencer, executive director of the Carson J. Spencer Foundation. Most people who commit suicide leave notes saying that they have relationship, family, or money problems, not that they can’t stand their bosses. The Technocentre deaths, says psychiatrist Christophe Dejours, professor at France’s National Academy of Arts and Trades, “indicate that something is happening at Renault in the way the work is organized that is putting people off balance.” In September 2007, yet another Renault employee killed himself. Few details were reported, other than that the victim was a maintenance technician who worked at the company’s D’Aubevoye facility, which tests the prototype cars coming out of the Technocentre. (The two operations are managed jointly by the same executives.) He committed suicide while out on sick leave. Not long after that, a Renault health-and-safety committee, prodded by the Technocentre unions, brought in the consulting firm Technologia to look into the company’s operations at the campus. The report, which was made public, painted a picture of a troubled facility. Technologia found that 31 percent of Technocentre employees—three times the norm for workers in similar jobs—were under stress and at risk to develop psychological problems. It also said that the problems at the Technocentre can be linked to “the combination of professional passion and ambition and a managerial system that pushes these buttons to meet their increasingly ambitious goals.” The first-person accounts in the report are more specific. As one engineer in the Technocentre study put it, “The workload is such that it is necessary to work every night of the week until about 11 or midnight.” Another added that the extra work, performed without compensation, is taken as proof of an employee’s “devotion to the company.” The comments of a third worker went straight to Ghosn’s management style: “It’s a lot easier to give nonrealistic objectives and to see what comes out than it is to give objectives with some cohesion. From a human standpoint, it’s a catastrophe.” Earlier this year, at the midpoint of his four-year plan, Ghosn had a lot to be proud of. Renault’s operating margin rose to 3.3 percent in 2007, from 2.6 percent the year before, and revenue was up slightly, to $60 billion (or 40.7 billion euros). Renault has expanded its presence in emerging markets, and non-European customers now account for more than a third of all sales. In addition, Renault launched six new models in 2007, with nine more coming out in 2008. But some analysts believe that the company will fall short of its ambitious goals and may have to scale them back in the coming months. In fact, by the most basic measure—how many cars are sold in a given year—Renault’s sales have remained flat since 2005. The new Laguna family sedan (the car Raymond was working on, released with great hype in September 2007) failed to meet expectations. In the wake of the suicides, Renault named Bernard Ollivier, an engineer, to manage the Technocentre and implement new measures to improve morale at the facility. Among these initiatives are weekly meetings to bring supervisors closer to their staffs and the hiring of about 100 new vehicle-development employees to lighten the load of those already there. “We took these steps because we’re concerned,” Ghosn says. But the innovations aren’t enough for some employees at the facility, who dismiss them as window dressing. The amount of work and pressure, they say, remains relatively the same, and many employees still work extremely long hours. The situation was driven home again in February, a year and a half after the first suicide at the Technocentre. Even as Renault’s human resources chief, Gérard Leclercq, was announcing at a press conference that the company was on a “good course” toward improving labor conditions at the facility, the automaker separately confirmed what the local newspapers had reported a few days earlier: Another Technocentre worker had been found dead—the fifth suicide among Renault employees. People close to the victim say that he had worried for some time that his job was in jeopardy because he wasn’t proficient enough in English. Related LinksCarmakers Post Mixed ProgressThe Minimum Wage and EmploymentAre Minimum Wage Hikes More Effective Than Tax Rebates?

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