Author: CNBC Online news

The Lincoln Aviator suggests the luxury American brand ‘has got its mojo back’

Source: Lincoln
Lincoln Aviator

The Lincoln Aviator is the latest new model from the luxury American brand, and industry watchers say it is yet more evidence that the brand has returned to its roots.

After showing off a concept version of the vehicle at the New York Auto Show in early 2018, the brand is unveiling the production version at the Los Angeles Auto Show on Wednesday.

The Aviator comes as Lincoln is still enjoying the astounding success it has had with the 2018 redesign of the Lincoln Navigator. After Lincoln introduced that vehicle, the company was selling them so fast it was having trouble keeping production up. That momentum has largely continued throughout the year. In the month of October Navigator sales were up 70 percent over the same month in 2017. Many customers are opting for the most luxurious versions, such as the Black Label, which can command prices up to $100,000.

Now the brand is aiming to repeat the trick in another segment.

The 2019 Lincoln Aviator is a smaller SUV than the Navigator, and it is the latest step Ford's luxury brand is taking in carving out a place for itself as a purveyor of spacious and comfortable SUVs that float over the pavement.

Source: Lincoln
Lincoln Aviator

The Aviator is a resurrected brand — Lincoln first sold it from 2002 to 2005. The Aviator shares some design language with the Navigator, such as the distinctive design of its wheels and its plush leather seats.

But there are several firsts here that suggest Lincoln is not simply trying to make a smaller Navigator replica. The brand commissioned the Detroit Symphony to design all the interior alert chimes for the doors. The vehicle also has the ability to “see” potholes and uneven pavement and adjust the suspension to keep the ride smooth.

“It is not overstating it to say Lincoln has got its mojo back,” said Karl Brauer, who is executive publisher for Kelley Blue Book and Autotrader. “The company in the last couple of years has made some really positive moves.”

The models Lincoln has come out with recently, including the Navigator and the Continental full-size sedan, show that the company has tried to carve more of a traditionally American niche out for itself by making vehicles that emphasize plush interiors and gentle, floating rides. This is a departure from older habits in Detroit of trying to make American versions of European brands that emphasized sportier designs and features, such as those found in BMWs.

“I think Lincoln discovered that they were much better at being Lincoln than they were at being the American version of BMW,” he said.

That said, it is perfectly fine if Lincoln wants to come out with a high-performance variant of a sedan or SUV, he added. The Aviator will offer a performance trim level of the vehicle that will come with a combination hybrid and twin turbocharged powertrain that Lincoln said is a first for the brand.

AFL-CIO worries GM job cuts are a ‘smokescreen for offshoring’

AFL-CIO’s policy director on General Motor’s decision to lay off thousands
4 Hours Ago | 05:13

The AFL-CIO labor union is worried that General Motors' decision this week to halt production at several factories and cut thousands of jobs in the U.S. could be a pretext for sending work outside the country where labor costs are significantly cheaper.

“This situation is really about whether or not GM is going to put new work into these plants or whether this is a smoke screen for offshoring work,” AFL-CIO policy director, Damon Silvers said on CNBC's Power Lunch.

GM was not immediately available for comment. The automaker said Monday it will begin phasing out the production of several vehicles at a number of factories in the United States and Canada.

GM has said it is cutting production of these vehicles in part because they are slow-selling, but Silvers said GM recently decided to start making the Chevrolet Blazer SUV in Mexico, rather than the plant in Lordstown, Ohio that it plans to wind down.

GM has a “particularly bad history” compared with Ford and Chrysler of looking to move jobs off shore he said.

Successful auto companies worldwide pay decent wages and benefits to high-skilled workers, Silvers said.

“The bottom feeders do things like exploit $2-an-hour wages, which is what GM pays in some of its factories in Mexico,” he said. “What we want them to do is to be in a first tier strategy that really takes advantage of the skills and capacity … of America's workers and America's communities.”

Ex-GM CEO: Factory closures are decided by the consumer, not the White House

Getty Images
Cadillac's emblem is displayed on the front of a Cadillac ATS Coupe in Detroit.

General Motors' decision to essentially stop production at five factories in North America and eliminate roughly 14,700 jobs wasn't a political one, despite pressure from leaders in Washington and Canada to reverse course, said former CEO Dan Akerson.

GM's current CEO Mary Barra took some heat from U.S. President Donald Trump, who said Monday that the automaker should put another factory in Ohio, where it plans to wind down production of one plant after 2019. Canadian Prime Minister Justin Trudeau said he was disappointed the company will no longer produce vehicles at a plant in Ontario. The United Auto Workers labor union also said it will fight GM's decision.

The shares dipped in afternoon trading Tuesday after Trump said he was looking at cutting all of GM's subsidies. It's shares were down by 2.9 percent.

But GM is simply doing what it can to maximize its efficiency and prepare for a still uncertain future in the automotive industry, Akerson said on CNBC's “Squawk on the Street” on Tuesday. Its choice to shift production away from factories that make cars and to make better-selling and more profitable SUVs, trucks and crossover vehicles is simply responding to market forces.

Car sales have dropped, in just five or six years, from representing 50 to 60 percent of the market to 20 to 30 percent of the market.

“This isn't a choice that is being made in the Oval Office or the board room or on the factory floor. They are being made around the kitchen table,” said Akerson, who served as GM's CEO from 2010 to 2014. “Fundamentally, the industry is oversupplied right now. GM's plants are running at about 70 to 71 percent capacity. You can't make money and produce cash to fund future ambitions, moves that I think are necessary to position the company for the long term.”

In the past, the company was far more reluctant to make these tough choices to secure its future, and suffered for it, he said.

“These decisions weren't made back in the 1990s and early 2000s, and the inevitable came to pass, and the company went into bankruptcy,” he said.

Now a new generation of consumers is becoming more influential in the market, and they appear to have different buying habits and an unprecedented interest in other types of mobility products and services, such as ride-sharing.

“Right now, GM is trying to change,” he said. “They're looking for a couple more cards, trying to show more flexibility, trying to free up cash flow in the future so they can play the electric game, so they can play the shared ownership game, and it is critically important that the company position itself while it is healthy, not in a crisis.”

Driverless cars will need cities covered in sensors, China’s Didi Chuxing says

Driverless cars will need cities covered in sensors, DiDi VP says
2 Hours Ago | 02:33

Chinese ride-hailing giant Didi Chuxing wants to become one of the front-runners in developing self-driving cars, the company's chief scientist for smart transportation initiatives said on Tuesday.

Didi has been working to develop autonomous vehicle technologies for three years, and has teams based in the United States and China, Henry Liu told CNBC during a fireside chat at the East Tech West conference held in the Nansha district of Guangzhou, China.

“We already have autonomous vehicles being equipped with our sensors and we have licenses in both Mountain View, California, as well as in Beijing, China,” he said. “We'll be one of the front-runners in terms of the autonomous vehicle technology development.”

Automakers and internet companies around the world are investing millions of dollars and rolling out long-term plans for self-driving vehicles. Many analysts believe the widespread adoption of these vehicles will potentially start to pick up in 2021 or 2022.

“We can also predict in terms of what's going to happen in the next 15 to 30 minutes, in terms of traffic flows.”
-Henry Liu, chief scientist for smart transportation, Didi Chuxing

For its part, Didi is developing autonomous vehicles on two fronts, said Liu.

First, by installing sensors in vehicles that can sense the environment on the road, detect objects, plan travel routes and ultimately, control the cars. The second front is what he described as “cooperative vehicle-highway systems” that rely more on the environment — that means having sensors installed on roads, buildings, lamp posts and the surrounding areas to provide relevant information to self-driving cars.

“The main difference is that we not only have the vehicle sensing capability, we're also going to have a roadside sensing capability, so we will be able to provide the autonomous vehicles with environment information, from the infrastructure side,” he said.

But such a development will require the presence of very high-speed mobile internet connection readily available, Liu added. China is developing that technology very aggressively and hasoutspent the United States since 2015.

Didi's advantage: 550 million users

One of Didi's major advantages when it comes to developing self-driving, smart cars is that it has a massive transportation network, according to Liu.

Didi has about 550 million users taking an average of 30 million rides every day across more than 400 cities. That allows the Chinese firm to collect plenty of data about its users, from their travel habits to traffic conditions in various cities. Generally, artificial intelligence systems require large volumes of so-called training data to learn patterns and behaviors.

“We collect a hundred terabytes of vehicle trajectory data per day,” Liu said, adding that Didi processes nearly five times as much information daily to better estimate travel routes, prices and demand for vehicles at any given time. The data also helps cities plan their traffic networks better to avoid congestion.

Earlier this year, Didi launched a so-called “Smart Transportation Brain” service with Chinese traffic management authorities. Using vast amounts of data from Didi, local governments and other businesses, the service uses artificial intelligence to recommend improvements to existing transport systems that can reduce travel times for commuters.

“We can also predict in terms of what's going to happen in the next 15 to 30 minutes, in terms of traffic flows,” Liu added.

Didi remains one of China's most valuable start-ups, backed by major names including Apple, Alibaba and SoftBank, and it has a valuation of $56 billion, according to CB Insights. Two years ago, it acquired Uber's China business to establish its dominating position in the Chinese ride-hailing market.

WATCH: Didi Chuxing's chief scientist for smart transportation talks about self-driving cars

We use the data to help passengers and cities, says DiDi VP
3 Hours Ago | 03:45

Fears that the Nissan scandal could threaten its global alliance are ‘overly alarmist’

Akio Kon | Bloomberg | Getty Images
Carlos Ghosn, chairman of Nissan Motor Co., speaks during an interview in Yokohama, Japan, on Thursday, Feb. 23, 2017.

The arrest of Carlos Ghosn, chairman of Nissan and a board member at Mitsubishi, has also thrown into question the future of the two companies' global alliance with French automaker Renault. But analysts say that's not likely.

Ghosn was arrested Monday amid allegations of financial misconduct, sending shares of the Japanese automakers on a downward spiral on Tuesday.

Nissan said in a statement Monday that “over many years,” Ghosn and board director, Greg Kelly, had been under-reporting compensation amounts to the Tokyo Stock Exchange securities report. According to Reuters, Japanese media said Ghosn had reported about 10 billion yen ($88.9 million) of annualcompensation as about 5 billion yen for several years.

Nissan Chief Executive Hiroto Saikawa, said at a Monday press conference that both men had been arrested and he was planning to propose to the board on Thursday to remove them from their roles. Mitsubishi also said that it would seek to remove Ghosn, who sits on its board of directors, from his current position at the company.

“We find media headlines saying that the alliance may fall to be overly alarmist.”
-Richard Hilgert, Morningstar

Shares of Nissan tumbled by 5.45 percent on Tuesday, while Mitsubishi tanked 6.85 percent. Renault shares were down more than 8 percent in European trade on Monday.

Alliance will likely continue

Ghosn is also the chairman and CEO Renault, and his arrest has thrown into question the future of the company's alliance with Nissan and Mitsubishi. He is also chairman and CEO of the alliance.

Renault owns 43.4 percent of Nissan, while Nissan owns 15 percent of Renault, with no voting rights in a partnership that began in 1999. Since 2016, Nissan has held a 34 percent controlling stake in its smaller Japanese rival, Mitsubishi.

Nissan Chairman Carlos Ghosn arrested for violating Japanese financial law
12:48 PM ET Mon, 19 Nov 2018 | 01:09

“While we view the allegations against Ghosn as a serious breach of shareholder trust in the senior leadership of not only Nissan but also the entire alliance, we find media headlines saying that the alliance may fall to be overly alarmist,” Richard Hilgert, a senior equity analyst at Morningstar, said in a note.

“The scandal represents substantial key-man risk to the alliance but, in our opinion, the risk does not rise to the level of existential,” he said.

Another analyst also told CNBC's that the alliance will likely continue despite Ghosn's arrest.

“Our belief is that the alliance will continue to pursue the joint activities,” said Janet Lewis, head of industrials research, Asia, at Macquarie Capital Securities on “Squawk Box” Tuesday. “It did not depend on one person, there are hundreds of Renault and Mistubishi and Nissan employees working together on these projects.”

“The degree of integration at lower levels is substantial, nobody wins if they decide to, to move away,” she said.

'Truly shocking'

The latest fiasco surprised some analysts.

“It's truly shocking,” Rebecca Lindland, executive analyst at Kelley Blue Book, told CNBC's “Street Signs” Tuesday in response to the allegations against Ghosn.

“To see this, to hear this unfold. It's just, it's terrible,” she added. “It's such … a disgrace in many ways and such a waste of an incredible career.”

Morningstar's Hilgert echoed Lindland's sentiment.

“The news was a complete shock to us,” Hilgert said in his note. “We had respected Ghosn as an adept industry operator and credit him with an impressive turnaround at Nissan in the early 2000s, as well as building the Renault- Nissan-Mitsubishi alliance.”

— CNBC's David Reid and Robert Ferris, and Reuters contributed to this report.

Carlos Ghosn no longer capable of leading Renault, French finance minister says

Patrick T. Fallon | Bloomberg | Getty Images
Carlos Ghosn, chairman and chief executive officer of Nissan Motor Co. and Renault SA, speaks during the 2017 Consumer Electronics Show (CES) in Las Vegas, Nevada, U.S., on Thursday, Jan. 5, 2017.

Carlos Ghosn isn't currently fit to lead Renault following his arrest in Japan, French Finance Minister Bruno Le Maire has said.

Ghosn, who acts as CEO of Renault and chairman of both Renault and Nissan, was placed under arrest in Japan on Monday after he allegedly violated Japanese financial law. The arrest followed an investigation by a select number of people at Nissan.

The Japanese carmaker has said it will recommend that Ghosn be removed from his role and now attention has turned to what position Renault will take.

The French government has a 15 percent stake in Renault, which in turn holds a 43.4% stake in Nissan. French Finance Minister Bruno Le Maire has said Renault should now set up an interim management structure.

“Carlos Ghosn is no longer in a position capable of leading Renault,” Mr Le Maire told France Info radio on Tuesday.

Le Maire added that the French government had already investigated Ghosn's tax affairs but had found nothing wrong.

Nissan's Carlos Ghosn throws future of auto alliance into question
5:44 AM ET Tue, 20 Nov 2018 | 03:09

Overnight, shares of Nissan tumbled by 5.45 percent, while Mitsubishi, a third party in the auto alliance, tanked 6.85 percent. At the last check Renault shares were down more than 2 percent in European trade on Monday.

Ghosn joined Renault in 1996, then spearheaded the Renault – Nissan alliance in 2005 and led both firms through a turnaround. In 2016, Mitsubishi's inclusion helped expand the alliance. The three firms together account for one in every nine cars produced around the world.

Attention will now turn to how Renault treats the allegations of financial misconduct laid by both Nissan's executives and Japan's public prosecutor.

The company has confirmed to CNBC it will now meet on Tuesday night and also issued a short statement, defending its alliance with the Japanese firm.

“Pending provision of precise information from Carlos Ghosn, Chairman and Chief Executive Officer of Renault, the above directors wish to express their dedication to the defense of Renault's interest in the Alliance. The Board of Directors of Renault will be convened very shortly,” the statement read.

Auto alliance’s step not to back Ghosn could be key to its survival, says economist
5:36 AM ET Tue, 20 Nov 2018 | 02:35

Ana Nicholls, Managing Editor, Industry Briefing at the Economist Intelligence Unit told CNBC's Street Signs on Tuesday that Renault's apparent reluctance to back Ghosn would suggest that the alliance looks set to be protected.

Nicholls said she spoke to Ghosn last week and, coincidentally, discussed how the alliance would be shaped once he stepped down as the most senior executive.

“He said there was obviously other people within the group who had experience on both sides of the alliance who could take over,” she said.

Nicholls added that one obvious candidate to take over, at least at Renault, was Thierry Bollore, currently the French firm's chief operating officer.

The autos watcher added that within the overall alliance, the makeup of executives is currently “French heavy” and that could be set for change.

Ghosn scandal could trigger a series of crises for Nissan, Renault, Mitsubishi

Marlene Awaad | Bloomberg | Getty Images
Carlos Ghosn, chairman of the alliance between Renault SA, Nissan Motor Co. and Mitsubishi Motors Corp., pauses during a Bloomberg Television interview at the Paris Motor Show in Paris, France, on Tuesday, Oct. 2, 2018.

There aren't many automotive executives who can claim to have saved a company, let alone three. But now, Carlos Ghosn might also prove to be the man responsible for shattering the global alliance that transformed Renault, Nissan and Mitsubishi into an industry powerhouse.

A day after prosecutors arrested Ghosn and another senior Nissan executive, accusing them of serious financial irregularities, the fallout was escalating. Some auto analysts questioned whether the alliance between the three carmakers could survive the affair, leading nervous investors to pare back their holdings. U.S. traded shares of Renault have slid by about 11 percent since news of Ghosn's arrest in Tokyo broke Monday while Nissan's shares in the U.S. fell by about 6 percent.

Self-destruction

“You're witnessing the single greatest act of self-destruction in modern automotive history,” said Eric Schiffer, chairman of Los Angeles-based Reputation Management Consultants. “Not only has [Ghosn] destroyed his life, but he puts those companies in uncharted and dangerous waters.”

His swift fall from grace places the carefully constructed alliance he built between the three automakers at risk and will have far-reaching repercussions across the industry, auto executives and analysts say.

Perhaps only Tesla CEO Elon Musk and former Fiat Chrysler CEO Sergio Marchionne, who died last July, came close to matching the high-profile persona of the 64-year-old Ghosn. Born in Brazil of Lebanese parents, he began his career in France with the tire-making giant Michelin.

In 1996, Ghosn was recruited by Paris-based Renault and tasked with pulling together a turnaround plan for the struggling automaker. His strategy worked so well that Renault was back in the black in barely a year.

Ghosn got the chance to prove he wasn't a one-shot wonder when Renault assigned him to lead its efforts to revive debt-laden Japanese automaker Nissan in 1996. With only three of its product lines making money, many observers expected that country's second-largest manufacturer to go broke. There was widespread skepticism when Renault announced plans to purchase a 38.6 percent stake – which has since grown to 43.4 percent.

Skeptics

At the time, former General Motors Vice Chairman Bob Lutz said Renault would be better off “taking $5 billion, putting it on a barge and sinking it in the middle of the ocean.” But within three years, Ghosn's Nissan Revival Plan had taken hold. The automaker halved its debt and was delivering profit margins of around 4.5 percent.

“I said it would never work” Lutz said on CNBC's “Squawk on the Street” on Monday “and to my amazement it has worked fabulously well for both companies.”

Originally working as Nissan's chief operating officer, Ghosn was soon its CEO and, a few years later, added the title of chief executive of Renault, as well as head of their Renault-Nissan Alliance.

Ghosn had long left open the possibility of adding a third leg to the stool and, in 2016, he made his move, directing Nissan to purchase a controlling stake in Mitsubishi, the small Japanese automaker teetering on the brink of bankruptcy after a series of financial and regulatory scandals.

While still too soon to tell whether Mitsubishi is completely out of the woods, it added enough volume to the alliance total that, in 2017, it nudged past both Volkswagen and Toyota to claim the crown as largest automotive group in the world by unit sales.

Forcibly removed

But that celebration could be short-lived. Ghosn, who has repeatedly sidestepped questions about his potential retirement, is now being forcibly removed from all his posts in the wake of this week's breaking scandal.

On Monday, Yokohama-based Nissan issued an initially terse release stating that, “Based on a whistleblower report, Nissan Motor Co., Ltd. (Nissan) has been conducting an internal investigation over the past several months regarding misconduct involving the company's Representative Director and Chairman Carlos Ghosn and Representative Director Greg Kelly.”

Within hours, reports began circulating that Ghosn and his hand-picked lieutenant had been arrested by authorities in Tokyo where they faced a number of potentially serious allegations. Ghosn — who was now serving as Nissan chairman — was accused of concealing as much as 5 billion yen, or about $45 million, in income, as well as misusing corporate funds. Precise details have yet to be released, however.

For the past two decades, Carlos Ghosn was seen as one of the biggest rock stars in a Japanese business world normally skeptical of “gaijin,” or foreigners. He even became a star of his own comic book series. Since the accusations were made public, however, his image has been washed away by a tsunami of bad news. Reputation expert Schiffer told CNBC, “There will be blood because it is about preserving honor and trust with the public.”

Anger and disappointment

That became apparent within hours. “I feel strong anger and disappointment,” Ghosn's handpicked successor as Nissan CEO, Hiroto Saikawa told reporters at Nissan headquarters in Yokohama. “I am very sorry.”

The Japanese automaker quickly moved to fire Ghosn, even as pressure mounted on Renault to do the same thing a half a planet away. The French government, the automaker's biggest shareholder, called for a shake-up in management. Renault plans to name its chief operating officer Thierry Bollore as an interim replacement for Ghosn, the Wall Street Journal reported Tuesday, citing unnamed sources.

“Carlos Ghosn is no longer in a position where he is capable of leading Renault,” Finance Minister Bruno Le Maire told France Info radio. But he added that the government “(has) not demanded the formal departure of Ghosn from the management board for a simple reason, which is that we do not have any proof and we follow due legal procedure.”

The fallout could, and likely will, continue according to several observers. During a meeting with reporters in Tokyo on Tuesday, Mitsubishi CEO Osamu Masuko said the very alliance that Ghosn strung together is in jeopardy. “I don't think there is anyone else on Earth like Ghosn who could run Renault, Nissan and Mitsubishi,” he said.

Dire warnings

Whether such dire warnings prove true is uncertain. Though they legally operate as independent manufacturers, after nearly two decades working together it can be difficult to distinguish between Nissan and Renault in many areas. They share most of their product platforms, as well as an extensive array of components. They work closely together on advanced research programs, including electric, hybrid and autonomous driving. And they are intertwined in global manufacturing and distribution. Since being pulled into the group, Mitsubishi has also begun mingling its operations.

Many of those activities were carefully crafted by Ghosn, especially the alliance's focus on the technology needed for future mobility, such as battery-electric vehicles like the Nissan Leaf.

“He was an asset in navigating globalized markets,” said Jeremy Acevedo, manager of data strategy for automotive service Edmunds. “So really this is coming at a terrible time.”

Daimler

It's not just the Renault-Nissan-Mitsubishi Alliance at risk. For the past nine-years, Ghosn has carefully sculpted a separate partnership with Daimler AG, the parent of the Smart and Mercedes-Benz brands.

Though there are none of the financial cross-holdings found in the alliance, the partners are today working together on a variety of projects. Engines made by Nissan in Smyrna, TN, for example, are being used in Mercedes vehicles assembled in Alabama. Mercedes and Nissan's Infiniti brand share a Mexican assembly plant. And a platform developed by Daimler underpins the Smart fortwo and Renault Twizzy.

At least initially, the partnership with Daimler was nurtured by Ghosn and his German counterpart, Daimler CEO Dieter Zetsche, who said at a news conference during the Paris Motor Show last month, “Without the chemistry between us, maybe this wouldn't have happened.”

There have been questions about whether it would survive Zetsche's scheduled move to relinquish the CEO post next year, moving into the post of Daimler chairman. Last month, he told reporters at a joint news conference with Ghosn, “I don't see from my perspective why the momentum in this relationship should change.” But with the Nissan boss enveloped in scandal and the future of the Renault-Nissan-Mitsubishi Alliance itself uncertain, all bets are now off.

It is, of course, possible that Ghosn could survive the scandal, the alle..

Nissan board votes to remove Carlos Ghosn as chairman

Nissan board ousts Carlos Ghosn as chairman
8:30 AM ET Fri, 23 Nov 2018 | 04:02

The board of Japanese auto giant Nissan has voted to remove Carlos Ghosn from the role of Chairman and Representative Director.

Nissan said on its website Monday that it will now form an advisory committee to propose nominations from the board of directors for Ghosn's replacement. A separate committee to review Nissan's governance and executive pay is also to be created.

The car company said the Nissan board “confirmed that the long-standing Alliance partnership with Renault remains unchanged and that the mission is to minimize the potential impact and confusion on the day-to-day cooperation among the Alliance partners.”

In an explosive press conference Monday, Saikawa said that “over many years” Ghosn and Representative Director, Greg Kelly, had been under-reporting compensation amounts to the Tokyo Stock Exchange securities report.

Nissan added that, in regards to Ghosn, “numerous other significant acts of misconduct have been uncovered, such as personal use of company assets.” The company said Ghosn had also made inappropriate investments.

Shares in auto firm Renault, where Ghosn remains as chairman and chief executive, have fallen 0.3 percent.

Within Nissan there are six full Board Members and three Representative Board members. The company also has four auditors. Executives at the French firm Renault (which Ghosn also chairs) reportedly also dialed into the Nissan board meeting.

The Tokyo Prosecutors Office has declined to comment on whether Ghosn has admitted to the claims, but said the Renault chairman is being held in a Tokyo detention center.

Nissan said Monday that a whistle-blower had passed information over Ghosn and Kelly to Nissan's auditors who then began a wider investigation. The evidence was then passed to Japan's public prosecutor.

The prosecutor said Ghosn and Kelly had conspired to understate Ghosn pay packet at Nissan from 2010 to 2015, adding that the two men had recorded only half the actual 10 billion yen ($88.5 million).

French government and Renault taking more cautious approach than Nissan
3:05 AM ET Thu, 22 Nov 2018 | 02:27

An alliance between Renault, Nissan, and Mitsubishi has been built up over the last two decades. Nissan and the French government each own 15 percent of Renault. In turn, the French auto firm holds a 43 percent stake in Nissan.

The French government had been pushing for a full merger between Renault and Nissan, prior to the unfolding scandal. Events of the previous few days have cast a shadow on the merger prospects and led some to speculate that a break -up of the three companies is now on the cards.

Ghosn is considered a hugely influential executive within the global automotive industry. The cross-ownership alliance of Renault, Nissan, and Mitsubishi have all enjoyed an upswing in fortunes under his leadership. After successfully restructuring Renault in the late 1990s, Ghosn earned the nickname “Le Cost Killer.”

Born in Brazil, Ghosn became the world's first person to run two companies on the Fortune Global 500 simultaneously when he assumed the CEO roles at both Renault and Nissan in 2005. He stepped down as Nissan CEO in 2017.

In June this year, Renault shareholders voted by a slim majority to approve a 7.4 million euro ($8.4 million) pay package for Ghosn's work in fiscal 2017. According to other securities filings, Ghosn earned 735 million Japanese yen ($6.52 million) from Nissan and 227 million yen from Mitsubishi for the same period.