Nissan’s chairman was arrested, and now his auto-cratic empire could crumble
Carlos Ghosn, Nissan chairman and emperor among plebes in the auto industry, was arrested by Japanese authorities yesterday for underreporting his compensation by $44m.
Oh, just $44m?
Now that his crimes are public, Ghosn — who was also CEO of Renault, chairman of Mitsubishi, and chairman of the largest auto alliance in the world — could see his car-making colossus collapse in a cloud of exhaust.
The car whisperer crashes at full speed
After joining a struggling Nissan in 1999, Ghosn turned the struggling car(maker) around by allying with Renault and later Mitsubishi to pool technology, components, and R&D.
Ghosn’s strategy — combined with remorseless cost-cutting — put the smaller automakers back in the fast lane.
Last year, Ghosn’s Renault-Nissan-Mitsubishi Alliance accounted for 11% of the cars sold in the world, more than Volkswagen, Toyota, or General Motors — and it was on track to sell more this year.
Greedy CEOs aren’t too big too fail
Ghosn’s ruthless management style made him a cult hero in certain business circles: French entrepreneurs called him “le cost killer,” and Japanese fans fawned over a best-selling manga comic book about his life called The True Life of Carlos Ghosn.
Ghosn didn’t merely rule with an iron fist, he broke rules with an iron fist: Tokyo prosecutors say Ghosn failed to report about half of the $89m he brought home over 5 years, and Nissan revealed that Ghosn had committed “significant acts” of financial misconduct.
Nissan and Mitsubishi plan to oust Ghosn, who received $16.95m in compensation from the 3 automakers last year and has publicly fought to preserve his high compensation (Renault’s board is deliberating).
The ghost of Ghosn may destroy his own auto empire
Renault owns 43% of Nissan, Nissan owns 15% of Renault, and Nissan owns 34% of Mitsubishi.
Now, all 3 automakers might be f*cked. After the arrest, Renault shares skidded more than 12%, Nissan shares spun out 11%, and Mitsubishi decelerated by more than 4%.