Carlos Ghosn, the ugliness of human egos and cultural differences

“This is a negative impact of the long regime of Mr. Ghosn,” Saikawa said. “This is a good opportunity to revise the way we work.” The situation is a shame – it’s an ugly story of human egos and cultural differences and history repeating itself.

Once again, innocent till proven guilty, but there are questions on all sides.

The Asahi newspaper is reporting, “(Ghosn) negotiated a secret post-retirement deal with the automaker that would give him 5 billion yen ($44.3 million). The Special Investigation Department of the Tokyo District Public Prosecutors Office apparently concluded that Nissan deliberately kept the deal secret.” If this is correct, it is indeed an example of extreme greed but is it a crime?

Does a person report money that has not been received? Nissan would be culpable for payments not reported, but if the payment was scheduled to be received in post-retirement does Ghosn have to declare it now?

Was Ghosn trying to hide money from the companies or his ex-wife because of an alimony payment? Why else would he use a nom de plume to receive an additional 1 billion yen a year in addition to the 1 billion yen he received as remuneration. The tweet by Rita, Ghosn’s first wife, has been taken down, but the word acrimonious comes to mind.

In an ominous youtube video entitled “Renault Nissan CEO Carlos Ghosn, on marriage and mergers at Los Angeles auto show California”, Ghosn talks about mergers as marriages, “alliances are like marriages, if you start a marriage where someone is very excited and someone is very skeptical…you’d better prepare yourself for a very short honeymoon. At the end of the day, human common sense is more important than business common sense.”

Does this contract include a clause that if Ghosn commits a crime or is fired for cause then the contract is null and void?

If Ghosn were so upset by his reduction in salary that he would embezzle money why didn’t he quit and go somewhere else, or call their bluff? Just because Nissan didn’t like the idea of paying Ghosn more than all his Japanese counterparts, other companies have no problem paying the big bucks. It is reported that General Motor’s CEO, Mary Barra, made over $22 million in 2017. As well-known and well-respected as Ghosn is (was) finding another job that paid more wouldn’t have that hard for him.

Once a final determination is made regarding Carlos Ghosn’s alleged misconduct and he is removed as chairman of Nissan is the company obligated to issue a public apology to customers, stockholders, and stakeholders?

Did Nissan consider the effect the public arrest would have on the stockholders/stakeholders before arresting him with the top Japanese newspaper covering the jet landing and the investigators going onto the plane? Ten seconds later the first layer of blinds go down, then the black blinds go down. Anyone in that plane knew someone outside was watching.

This is not the first time an executive has falsely reported their income or options payout. Sometimes the company has been complicit in the transactions. Does Nissan know for certain that another part of the alliance wasn’t working with Ghosn?

Bloomberg hedges the audacity of Nissan’s accusations by starting the paragraph with “It’s a little different in Japan.”
Bloomberg then goes on to say, “No executives at Takata Corp. have been charged over the millions of fatal airbags made by the now-bankrupt company. Toshiba Corp. restated six years of its corporate filings and 152 billion yen of profits because of accounting irregularities. Kobe Steel Ltd. misstated quality data on its products sold to more than 600 customers over nearly five decades. Nissan, Mitsubishi Motors Corp., Subaru Corp., Suzuki Motor Corp., Mazda Motor Corp., and Yamaha Motor Co. have all admitted to faking emissions tests. Yet there haven’t been any executive downfalls that compare to what’s happened to Ghosn and Kelly.”

From which company is Ghosn accused of stealing the money? Is it Renault, Nissan, the Renault-Nissan alliance? Is Ghosn being accused of financial misconduct/misappropriation or embezzlement? Why would Ghosn underreport his pay to the Japanese securities filings?

Nissan informed Renault that it was investigating potential financial wrongdoing at the Dutch-domiciled Renault-Nissan venture. This suggests to me that the whistleblower is someone that had access to Nissan and the alliance books, someone that was high enough up to see them, but not someone that was part of Renault.

Why did Nissan keep Ghosn’s deception secret from Renault till after the arrest? Why did he wait till Ghosn/Renault started talking merger to arrest him in Japan?

Was it a mistake by Ghosn to merge with Mitsubishi before merging Renault and Nissan? Nissan makes tons of money and shares the diesel engine with the localized Renault. Renault shares many platforms with the global Nissan. Mitsubishi produces diesel engines. What does Nissan need Renault for?

Will Nissan be better off without Renault as a partner?
Renault owns 43.4 percent of Nissan and 50 percent of Avtovaz; Nissan has 34 percent of Mitsubishi and 15 percent of Renault, non-voting stock. What effect will this have on Nissan sales worldwide?

Hiroto Saikawa has been sole CEO of Nissan since April 2017. While castigating Ghosn for 1 /12 hours, he used words such as was ‘a dark side of the Ghosn era which lasted for a long time,’ greedy and “long regime of Mr. Ghosn.” “We have confirmed these two are the masterminds,” Saikawa said of Ghosn and Kelly.

Why didn’t anyone tell Ghosn he was being investigated? How could he be Chairman and CEO and not have one person inside the company warn him?

It is said that Ghosn was good at charming people; journalists, politicians. But an insider said that he was different inside the company. A person with knowledge told me that he was not a well-loved CEO, that people feared him. He was not considered a particularly nice guy inside the company, more of a saber-rattler than a coach of a team. The further down the ladder you go, though the more people appreciated him.

As this is written Carlos Ghosn is still in jail. The Japanese can hold him for 23 days without charging him.

By | 2018-11-28T09:28:16+00:00 November 28th, 2018|Categories: Automotive executives, Infiniti, Mitsubishi, Nissan, Renault|Tags: , , |0 Comments

About the Author:

Lou Ann Hammond is the CEO of Carlist and Driving the Nation. She is the co-host of Real Wheels Washington Post carchat every Friday morning and is the Automotive, energy correspondent for The John Batchelor Show and a Contributor to Automotive Electronics magazine headquartered in Korea. Hammond is a founding member of the Women's World Car of the Year #WWCOTY, and the Concept Car of the Year, and former member of the North American Car and Truck of the Year #NACTOY. She is a guest contributor for Via Corsa magazine and Vicarious magazine.

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