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 Drama at Renault Nissan Mitsubishi Alliance, Carlos Ghosn arrested

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TSEnergyAnalyst
post Nov 20 2018, 03:52 PM, updated 6y ago

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Nissan's drama looks a lot like a palace coup

Nissan CEO Hiroto Saikawa denied that the revelation of Ghosn's 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.


Ghosn arrest raises questions about Renault-Nissan alliance's future
David Fickling
Bloomberg
November 19, 2018 18:43 CET

The downfall of kings is bloody and swift.

That certainly looks to be the experience of Carlos Ghosn. A few hours ago, he was chairman of Nissan Motor Co., Renault SA and Mitsubishi Motors Corp., and arguably the most lauded automotive executive of his generation. As of writing, he’s been arrested by Japan’s police over alleged misconduct, is on his way to being removed from his positions at Nissan, and his hand-picked successor has just spent an hour trashing his legacy.

Barely 18 months into his reign as Nissan’s CEO, Hiroto Saikawa, 65, had little good to say about his predecessor at an evening press conference in Yokohama. While he had plenty to offer about the seriousness of the allegations against Ghosn and his fellow director Greg Kelly, he mentioned little in mitigation. The activity under investigation involves alleged under-reporting of income in securities filings and personal use of company assets and expenses. Ghosn, 64, and Kelly, 62, haven’t had a chance to comment yet.

Given the former’s nearly two-decade involvement with Nissan, you’d expect even the most scrupulous director to take a more-in-sorrow-than-anger tone in announcing his departure. That’s not how things went down: Blame was apportioned to “the concentration of power in one individual” and Saikawa focused on “eliminating the negative aspects” of the “long regime of Mr. Ghosn.”

After grudgingly admitting some good came from Ghosn’s early years with Nissan, in recent years he’d been having a negative impact on the day-to-day operations of the company, Saikawa said. Given an opportunity to make a compliment when asked whether Ghosn was a “tyrant” or a “charismatic leader,” he demurred.

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. In this extraordinary performance, the tensions bubbling under the surface of the Renault-Nissan-Mitsubishi alliance in recent years have finally burst to the surface in brutal fashion.

As my colleague Chris Bryant argued earlier, the alliance has become a lopsided beast – essentially a Japanese company with a Dutch head office and an out-sized stake in the hands of the French government. Renault’s 43 percent stake in Nissan typically accounts for the largest share of its equity-accounted earnings. From the perspective of Japan, the French company can resemble a parasite attempting to control its intrinsically stronger host

The question is whether this bloodshed will be enough to tame the intra-group tensions. Ghosn, who turns 65 in four months’ time, had been focusing over the past year on resolving the structure of the group so that it could have a future without him as leader.

That task had seemed near-impossible thanks to the divergent interests of a French state with a lot of voting power and a Japanese company which made most of the money. It’s been clear for some time that Nissan wouldn’t be happy with any change to the status quo that didn’t reflect its centrality to the group. In a report that now looks prophetic, an unnamed Nissan executive was quoted by the Nikkei Asian Review earlier this year as saying a Renault-Nissan merger could never go ahead.

The challenge of untangling those threads looks even greater now, and that’s a worrying situation since there’s no clear path toward breaking the bonds of the marriage between Renault, Nissan and Mitsubishi.

A palace coup can sometimes be the first dawn of a better regime. More often than not, it’s the start of a civil war.

Source: http://www.autonews.com/article/20181119/C...mplate=mobile02
TSEnergyAnalyst
post Nov 20 2018, 04:21 PM

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https://www.bbc.com/news/business-46271048

...What has happened so far?
In a late night press conference on Monday, Nissan said an internal investigation prompted by a whistleblower had revealed "significant acts of misconduct".

The announcement sent shockwaves through the automotive industry where Mr Ghosn, 64, is seen as titan, responsible for a dramatic turnaround at Nissan in the early 2000s.

Nissan Chief Executive Hiroto Saikawa said "too much authority was given to one person in terms of governance," speaking at the Yokohama headquarters of the firm.

"I have to say that this is a dark side of the Ghosn era which lasted for a long time," Mr Hiroto said adding he was still thinking through whether Mr Ghosn was "a charismatic figure or a tyrant".

What are the accusations?
Prosecutors later said in a statement that Mr Ghosn and Representative Director Greg Kelly conspired to understate Mr Ghosn's compensation starting in 2010.
Mr Ghosn is accused of filing annual securities reports containing fake statements, which could mean up to 10 years in prison, or a fine of 10m yen, or both.

From 2010, Japanese firms have been required to disclose the salaries of executives who earn more than 100m yen.

Japanese prosecutors also said they had already raided Nissan's Yokohama headquarters, near Tokyo, as part of their investigation.



BBC Tokyo correspondent Rupert Wingfield-Hayes said the charges against Mr Ghosn had come to light because of a new law that had come into effect in Japan in June, aimed at improving corporate governance and uncovering corporate misdeeds.

He said under Japanese law, Mr Ghosn can be kept in custody for up to 23 days without charge.
No further details of his alleged misconduct have been given. But some specifics were being reported by Japanese media.

Broadcaster NHK reported, citing unnamed sources, that Nissan provided Mr Ghosn with houses in four countries without legitimate business justifications.
There has been no comment from Mr Ghosn or Mr Kelly.

How will this impact the Alliance?
As misconduct revelations emerged, the future of the car alliance led by Mr Ghosn remained unclear.
He has been credited with turning around both Nissan and Renault before becoming the linchpin of the alliance the firm's later formed.

The Renault-Nissan-Mitsubishi Alliance sold 10.61 million passenger cars and light commercial vehicles, making it the number-one automotive group worldwide.
Nissan chief executive Mr Saikawa insisted the partnership "will not be affected by this event".

TSEnergyAnalyst
post Nov 20 2018, 04:27 PM

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https://www.bloombergquint.com/business/wit...ther#gs.FA3MXwY

-- 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.
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This post has been edited by EnergyAnalyst: Feb 20 2019, 10:22 AM
TSEnergyAnalyst
post Nov 20 2018, 05:33 PM

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The year 2018 will be remembered in the auto industry as the end of an era as Ghosn falls

Renault-Nissan-Mitsubishi chairman and CEO Carlos Ghosn stands to be stripped of his roles at the automakers on allegations of making misleading financial statements and misusing company funds.

Ghosn is a giant in the automotive industry, who was known for making big brash decisions and turning around troubled companies.

Ghosn is sometimes compared with late Fiat-Chrysler CEO Sergio Marchionne, another workaholic who also had to integrate brands across continents and turn around troubled organizations.

Robert Ferris | @RobertoFerris
Published 14 Hours Ago Updated 12 Hours Ago
CNBC.com


Carlos Ghosn's abrupt fall as head of the Renault-Nissan-Mitsubishi Alliance leaves a leadership void in the auto industry that's still reeling from the unexpected death of Fiat-Chrysler CEO Sergio Marchionne.
The sector lost its two most charismatic and effective leaders in the space of a few months, industry analysts say.
"Mr. Ghosn is a giant not only in the automotive industry, but on the global business stage as well," said Autotrader analyst Michelle Krebs. "He was always at Davos and he was kind of a sage when it came to bigger economic and business issues. He was provocative, outspoken."

Ghosn's arrest by Japanese police in Tokyo on Monday shocked the auto world. He's been accused of underreporting his income to Japanese regulators and misusing company funds, Nissan and Mitsubishi both said.

Nissan executives said Monday that they will seek Ghosn's removal from his roles as chairman of Nissan and as chairman and CEO of the alliance. Mitsubishi said it plans to also remove him from its board.
The allegations of misconduct could bring Ghosn's career to an abrupt end, closing a chapter in an industry he played such a significant role in reshaping.

"He was an asset in navigating globalized markets and that has been so hard for the industry to adapt to," said Jeremy Acevedo, manager of data strategy for Edmunds, which provides information on cars and the auto industry. "Then you factor in Nissan's woes here in the U.S., they can definitely use a dose of his bold decision-making and nose for the future. So really this is coming at a terrible time."

Ghosn was known for his larger-than-life personality and for his tireless work schedule shuttling across the world to manage several automotive businesses across different continents. He was also credited with having a global vision and the ability to see possibilities other executives missed.

Many people thought the 1999 strategic alliance between French automaker Renault and Japanese company Nissan, a deal he engineered, was preposterous and doomed to fail.

"I said it would never work" former General Motors Vice Chairman Bob Lutz said on CNBC's "Squawk on the Street" on Monday "and to my amazement it has worked fabulously well for both companies."

Turning around Nissan made Ghosn something of a hero in Japan: there have been dishes at restaurants named after him and a Japanese comic book about his life.

"If you have not been a villain at a certain point in time, you will never be a hero," he said when asked about the book. "And the day you are a hero, you may become a villain the next day."

He was also known for his bold bet on electric vehicles, exemplified by Nissan's low-cost and well-known electric Leaf sedan. In 2017, he said he thought Nissan was probably the only automaker that was making money off the fledgling powertrain technology.

Ghosn's personality, work ethic and preference for swift-direct action has earned him comparisons to the late Fiat-Chrysler CEO Marchionne. The chain-smoking, espresso swilling and blunt-tongued executive unexpectedly died earlier this year, sending shockwaves through the industry.

While there are some differences between the two executives, they both shared a few common traits.
"You have these firebrands that are at the helm, and their tenures have been marked by really bold decision-making, and it has come bundled with really big personalities," Acevedo said.

Like Ghosn, Marchionne was known for being a tirelessly hard worker who slept on flights from one office to another. He also had to intregrate auto brands that spanned continents and entirely different cultures. As Ghosn is credited with breathing new life into Renault and Nissan, Marchionne was credited with saving Chrysler after the company declared bankruptcy during the financial crisis in 2009.

"There are shades of Marchionne here," Krebs said.
"We have lost the two most provocative, vocal, big personality individuals in the auto industry, apart from Elon Musk, who still has to prove himself," she said. "They don't make them like that anymore."

https://www.cnbc.com/2018/11/19/ghosns-abru...o-industry.html
acbc
post Nov 20 2018, 05:37 PM

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Sharks circling early.
TSEnergyAnalyst
post Nov 20 2018, 06:28 PM

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2018 has been a year of HUGE changes in Auto world as we know it due to 3 sudden changes in these three ICONS

1.Marchionne sudden demise

2. Elon Musk forced step down as chairman of Tesla

3. Ghosn's arrest


zweimmk
post Nov 20 2018, 09:10 PM

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QUOTE(EnergyAnalyst @ Nov 20 2018, 06:28 PM)
2018 has been a year of HUGE changes in Auto world as we know it due to 3 sudden changes in these three ICONS

1.Marchionne sudden demise

2. Elon Musk forced step down as chairman of Tesla

3. Ghosn's arrest
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At some point or another, they are bound to make mistakes. It's the same old story all over again ~ Greed, fame or power. Usually it's greed but take your pick nevertheless. And let's not forget, Nissan was also caught earlier for falsifying emissions data.

Just take a spin at the wheel of fortune, it's just a matter of time when [insert brand] slips up.

There's no point being loyal to any particular brand in this day and age is my opinion. Just get the car that you think is best and that's it.
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post Nov 20 2018, 09:19 PM

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QUOTE(zweimmk @ Nov 20 2018, 09:10 PM)

There's no point being loyal to any particular brand in this day and age is my opinion. Just get the car that you think is best and that's it.
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Well said bro
zweimmk
post Nov 21 2018, 08:34 AM

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On a personal note, it seems that the core of the entire scandal is just about him under-reporting his income and the alleged misuse of company assets, then they really don't have much on him other than not paying enough taxes to the country of Japan. That's not really a very difficult issue to solve other than to cut a deal to pay said amount of money within a period of said amount time.

On the hand, this was the guy who was credited for slashing cost and saving 2 companies from bankruptcy! Without him, those companies would have either closed down or be bought out by some other automotive car maker. His contributions far outweigh the severity of his alleged crimes. I have serious doubts that the companies would be where it is today without his vision and leadership.
TSEnergyAnalyst
post Nov 21 2018, 08:42 AM

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https://www.usnews.com/news/top-news/articl...e-without-ghosn
QUOTE
TOKYO (REUTERS) - THE Renault, Nissan and Mitsubishi car alliance may be hard to manage without the unifying figure of chairman Carlos Ghosn, who is police custody in Japan facing financial misconduct allegations, Mitsubishi Motors CEO Osamu Masuko said on Tuesday.

"I don't think there is anyone else on Earth like Ghosn who could run Renault, Nissan and Mitsubishi," Masuko told reporters in Tokyo.

Ghosn is chairman of Nissan Motor Co and Mitsubishi Motor Corp as well as chairman and chief executive of their French partner, Renault.

"The immediate problem is that while we still have people at the top of two companies, there is no one at the third," Masuko added, referring to Renault....
At press time, Carlos Ghosn has been been maintained as chairman and CEO of Renault .


The board, however, said it was appointing the automaker’s No. 2 executive, Chief Operating Officer Thierry Bollore, to temporarily fill in for Ghosn

https://www.apnews.com/75ebfd48cc7f4b3ba7e8abdbcfa91a28

This post has been edited by EnergyAnalyst: Nov 21 2018, 09:36 AM
Ginny88
post Nov 21 2018, 12:13 PM

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Why would somebody who earns fabulous income cheat on taxes? It's not as if the tax savings makes any difference to him when he already has more money than he can use for the rest of his life.

This post has been edited by Ginny88: Nov 21 2018, 12:13 PM
mingyuyu
post Nov 21 2018, 12:15 PM

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QUOTE(Ginny88 @ Nov 21 2018, 12:13 PM)
Why would somebody who earns fabulous income cheat on taxes? It's not as if the tax savings makes any difference to him when he already has more money than he can use for the rest of his life.
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yeah kinda weird as well , and how much can he save/spend on his family vacation or the residences?
MeToo
post Nov 21 2018, 12:23 PM

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QUOTE(Ginny88 @ Nov 21 2018, 12:13 PM)
Why would somebody who earns fabulous income cheat on taxes? It's not as if the tax savings makes any difference to him when he already has more money than he can use for the rest of his life.
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if what you said is true, the top 1% of the coporate world would have retired.


Cryptonoob
post Nov 21 2018, 12:35 PM

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Or maybe someone just wants him out?
cdspins
post Nov 21 2018, 01:23 PM

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nice read
TSEnergyAnalyst
post Nov 21 2018, 03:43 PM

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QUOTE(Cryptonoob @ Nov 21 2018, 12:35 PM)
Or maybe someone just wants him out?
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Most definitely.....
zweimmk
post Nov 21 2018, 05:29 PM

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QUOTE(Ginny88 @ Nov 21 2018, 12:13 PM)
Why would somebody who earns fabulous income cheat on taxes? It's not as if the tax savings makes any difference to him when he already has more money than he can use for the rest of his life.
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Why not? Good old fashioned greed comes to mind.

Why did the French or the British wanted to expand their empires when clearly they have more than enough?
TSEnergyAnalyst
post Nov 22 2018, 05:25 AM

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The drama has just become even more dramatic.


https://www.carscoops.com/2018/11/carlos-gh...panys-will/amp/

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zweimmk
post Nov 22 2018, 08:10 AM

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QUOTE(EnergyAnalyst @ Nov 22 2018, 05:25 AM)
“The board always said they would fight very hard against any reorganization that entrenched that second-tier status,” one person close to the board told the paper.

Now, we’re not saying that Nissan set up a trap for Ghosn, but the executive did seem to be caught off guard when he landed at Haneda airport on Monday afternoon.

The report says Ghosn “appeared unaware of any investigation” and had flown to Japan to meet the governor of Tokyo on Wednesday. Much to his surprise, the “welcoming committee” consisted of Tokyo prosecutors and reporters of the Asahi newspaper.
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Very speculative and the reported merger isn't anything of a secret. But I will say that this was what I also thought too in the last 2 days when news broke out. All the so called misdeeds are trivial in light of his accomplishments, more serious is how power will change once the merger takes place. Let's also not forget that many employees will be laid off as well once the company transitions into the new entity.

But now with Ghosn out of the picture, the 3 company alliance or whatever merger plans that he had will most likely be headed for failure. But at least for the part of Nissan, it should have enough of a roadmap for now to ensure that their ship sails smoothly for the next 3 years. What consumers should take note is if the company will head back to its old ways once a new CEO has been appointed.
TSEnergyAnalyst
post Nov 22 2018, 08:34 AM

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https://asia.nikkei.com/Business/Nissan-s-G...k-of-governance

NISSAN'S GHOSN CRISIS
Ghosn scandal unmasks Nissan's lack of governance
Automaker had few outside directors with management experience, say experts

YUSUKE KONISHI and KAORU YAMADA, Nikkei staff writers
November 21, 2018 03:16 JST
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This post has been edited by EnergyAnalyst: Feb 20 2019, 10:20 AM

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