Carlos Ghosn’s Fall From Grace
Here’s a quick take on what’s happening with Carlos Ghosn, and ultimately what will happen to the alliance that he helped build.
All good things must come to an end, it’s said. This couldn’t be more apt in the case of Carlos Ghosn. The 64-year-old chairman of Nissan Motor has been one of the most celebrated and revered CEOs today. Or was, till a few days ago.
For someone who has brought steadfastness to the auto industry through Renault-Nissan Mitsubishi alliance, Ghosn’s ride seems bumpy right now. His arrest in Japan over accusations of under-reporting his compensation and personal use of company assets, shows that he might have the biggest challenge ahead of him yet.
Here is a summation of all the happenings on this front.
Nissan’s Drama Looks a Lot Like a Palace Coup
Given Carlos Ghosn’s nearly two-decade involvement with Nissan, Nissan’s CEO, Hiroto Saikawa had little good to say about his predecessor, now on his way out for under-reporting income. While Saikawa denied that the revelation of the conduct by an internal whistleblower was a “coup d’etat,” but that he had to do so is a clue to how much it looks like one.
Read the full story here.
Why It’s a Bad Time for Renault-Nissan to Lose Carlos Ghosn
Ghosn is the architect of the two-decade-old Alliance and has enjoyed a near-cult following in Japan. For the moment, he continues to oversee the tie-up that includes complex cross-shareholdings.
The globetrotting Franco-Brazilian executive has maintained a towering presence even after the French state requested he relinquish some power to help pave succession planning, leading him to give up his role as Nissan’s CEO and install Thierry Bollore as chief operating officer at Renault. Ghosn’s removal would deprive the manufacturer of a seasoned leader, and follow a number of surprise shakeups in the sector that have brought new CEOs to Volkswagen AG, VW’s Audi brand, Daimler AG and Fiat Chrysler Automobiles NV.
Ghosn’s stature comes from having saved Nissan from near-collapse almost two decades ago and spearheading a global expansion of its brands and production. He also moved more quickly than competitors in making mass-market electric cars, propelling the Nissan Leaf into the best-selling battery-powered vehicle.
Read the full article here.
Fate of World’s Biggest Car Alliance Hangs on One Word: Ghosn
The world’s biggest car alliance is facing its biggest challenge yet, with the arrest of its iconic chairman threatening to upend the union of automakers he forged almost two decades ago.
With Nissan Motor Co. announcing plans to dismiss Carlos Ghosn as chairman just hours after allegations against him started to emerge in Japanese media, and Mitsubishi Motors Corp. set to do the same, the focus shifts to the third partner in the carmaking triumvirate: Renault SA.
At stake is an alliance that has vaulted Renault into a global heavyweight by giving it access to Nissan’s manufacturing and development expertise.
Staying loyal to Ghosn would run the risk of alienating Nissan, already displeased with some aspects of the companies’ partnership.
Read the full article here.
Separating The Renault-Nissan Twins Would Be Bloody
The central problem is that Nissan’s superior earnings and volumes should put it in the driving seat of the alliance — but the setup of the cross-shareholdings binding the companies together means that Renault, and ultimately the French government, won’t let go of the keys.
If Nissan bought an additional 10 percent stake in Renault on the market, its holding would rise to 25 percent — a level at which, under Japanese law, the French company would lose its voting rights in Nissan.
Ghosn’s ignominious downfall has perhaps fatally injured the relationship between Renault and Nissan, but it’s hard to see a better option for those involved than trying to somehow piece things back together.
For all the bad blood, the two sides have over the years become deeply conjoined. If they end up being separated too aggressively, the hemorrhage could be hard to stanch.
Read the full article here.
Nissan Is Said to Seek Better Terms in Renault Merger Talks
As Japan’s Nissan Motor Co. and Renault SA of France discuss ways—including a possible merger—to strengthen their ties, Nissan is resisting a combination unless the company gains more clout in key areas.
Nissan’s top managers believe they have the better engineering capabilities and want to lead crucial operations such as product development.
The companies are mapping out the future of the two-decade alliance and firming ties before a new generation of management takes over. Carlos Ghosn, (chairman of Nissan and Renault, who has been arrested for under-reporting income) and Saikawa are both 64.
If the two carmakers can’t agree on the terms of a merger, changing their lopsided cross-shareholding arrangement—letting Nissan boost its 15 percent stake in Renault and gain voting rights, for example—could be a way to solidify their relationship while enabling the Japanese to maintain independence.
Read the full story here.
What’s Next for Carlos Ghosn in Japan’s Unique Legal System
Should Ghosn be charged under the Financial Instruments and Exchange Act—the law he was arrested on suspicion of breaking, according to the Asahi newspaper—it could carry a prison sentence as much as 10 years.
Read the full article here.
