Nissan’s chairman was arrested, and now his auto-cratic empire could crumble

After one of the most powerful execs in the auto industry was arrested for fraud, the Renault-Nissan-Mitsubishi alliance he built could crash and burn.


November 20, 2018

nissan ghosn

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%.

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