Ghosn's Escape Means More Headaches for Nissan

Jan. 2, 2020
With profits at decade lows and its stock tanking, Nissan is rife with internal divisions over the ouster of its former leader and the way forward.

News this week that Carlos Ghosn, facing two trials and under heavy surveillance, pulled off a stunning escape from Japan left Nissan Motor Co. executives with jaws agape reaching for their messaging apps.

Just as astonished was Chief Executive Officer Makoto Uchida, who heard about his former boss’s getaway from media reports, according to a person familiar with the matter. Ghosn’s vanishing act throws up a distraction just when the new CEO needs to be laser focused.

With profits at decade lows and its stock tanking, Nissan is rife with internal divisions over the ouster of its former leader and the way forward. Now Ghosn is free to talk, armed with potentially damaging details about current Nissan executives.

“There must be many people at Nissan and Renault who think this could really be dangerous for them if Ghosn speaks,” said Koji Endo, a senior analyst at SBI Securities in Tokyo.

Uchida, who became CEO last month, has a long list of challenges. A top deputy abruptly q, some 12,500 jobs are on the chopping block, and he needs to refresh an aging lineup of models like the Skyline sedan and GT-R sports car to reinvigorate sales. Then there’s the matter of fixing the rocky relationship with French partner Renault SA as autonomous vehicles and electrification threaten to disrupt the industry.

Ghosn has said the charges of financial impropriety brought against him are false, trumped up by Nissan executives, Japanese prosecutors and government officials who opposed his plans to more deeply integrate the two carmakers. On Thursday, he issued a second statement about his escape to deny reports that his wife was involved in the plot.

“I alone organized my departure,” the 65-year-old said. “My family had no role whatsoever.”

Ironically, it was in a previous crisis two decades ago that Nissan, on the verge of bankruptcy, was rescued by Renault, which took a stake in the Japanese carmaker and sent in Ghosn to turn it around. Ghosn later added Mitsubishi Motors Corp. to the pact, forming the world’s biggest carmaking alliance.

Ghosn was arrested in November 2018 at Haneda airport, kicking off a legal saga that would result in him being released on bail, re-arrested and bailed out again. He was facing trial for financial crimes when on Dec. 31, as Japan entered a week-long holiday, Ghosn revealed that he had fled to Lebanon to escape what he described as a “rigged Japanese justice system.”

Hollywood Thriller

It’s still a mystery how Ghosn, one of the most recognizable foreigners in Japan, snuck out of the country despite being under round-the-clock surveillance -- an escape befitting a Hollywood thriller.

Theories abound, but it appears that Ghosn flew to Lebanon on a private jet operated by a subsidiary of Turkey’s MNG Holding, according to a senior Turkish official with direct knowledge of the matter. That’s after the former automotive executive apparently flew to Istanbul on another MNG aircraft on Monday morning, before being transferred between the two airplanes inside a box, the official said, asking not to be identified because of the sensitivity of the matter.

Meanwhile, prosecutors on Thursday began a search of Ghosn’s residence near Tokyo’s Roppongi district, a three-story building with four surveillance cameras around the entrance, local media reported. By early evening, prosecutors remained inside the house, while a gaggle of reporters trained their cameras on the front door.

Though Ghosn hasn’t been involved in running either company since his arrest more than a year ago, his shadow still looms large. That’s why when the news first broke Tuesday about his escape, it didn’t take long for the shock to ripple through the upper echelons of the two automotive giants he long led.

Aside from Uchida, top Nissan managers scrambled to find out details by messaging each other, the person said, asking not to be identified because of the sensitivity of the matter. In France, executives were stupefied and some initially questioned whether France was behind the extraction of one of its citizens in any way, according to another person familiar with the matter. France later denied having any involvement.

Representatives for Nissan and Renault declined to comment.

Settling Scores

Ghosn, who has said he’ll “finally communicate freely with the media” next week, is a man on a mission to clear his name and has scores to settle. He could create a stir by identifying Nissan executives whom he claims turned on him to advance their own interests. In April, Ghosn’s camp released a pre-recorded video that edited out the identities of those people.

Some of Ghosn’s targets aren’t hard to guess. Ghosn’s successor -- protege-turned-accuser Hiroto Saikawa -- blamed his former mentor for many of Nissan’s woes before being ousted himself last year in a scandal involving excess compensation. Then there’s Hari Nada, the former head of the CEO’s office, who became a key whistle-blower against Ghosn.

In his video, Ghosn also blasted Nissan’s management for the company’s poor performance, saying it lost sight of the need to move the alliance with Renault forward.

“I’m worried because obviously the performance of Nissan is declining, but also I’m worried because I don’t think there is any vision for the alliance being built,” Ghosn said in the video.

As for Uchida, he’s vowed to try to heal some of the wounds with its French partner, while restoring growth in profit and sales at Nissan. Ghosn on the loose looks likely to complicate those tasks.

Popular Sponsored Recommendations

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!