TOKYO — Nissan Motor, off to a fresh start with a leadership team installed last month, has been dragged into a past it is trying to leave behind by disgraced former chief Carlos Ghosn, who this week launched a fusillade against the company that once considered him its savior.
Ghosn, who early last week staged a daring escape from Japan while out on bail, on Wednesday spoke to the media for the first time since arriving in his parents’ home country of Lebanon.
He was arrested in Japan in November 2018 while chairman of Nissan, Renault and Mitsubishi Motors — the world’s third largest auto producing group — for allegedly falsifying financial statements and diverting company money for personal benefit.
Ghosn denies all charges and claims he is a victim of a conspiracy orchestrated by Nissan executives and Japanese government officials.
The ongoing legal wrangling between Ghosn and Nissan “has nothing to do with Nissan’s business today,” a senior Nissan official said. “Let us put the confusion behind.”
Few Nissan executives have spoken on the record amid the hubbub, though Masakazu Toyoda, a former METI official and independent director at Nissan whom Ghosn named as one of those plotting against him, blamed Ghosn for creating a drama.
“He fled the country illegally and is performing in a play he wrote himself,” Toyoda said. “I’m not going to deal with that.”
The intense media attention Ghosn has stoked shows how much interest there is in the ongoing saga. For Nissan, a man of its past has become an obstacle to its efforts to remake its tarnished image.
Nissan’s auto sales in Japan fell 7.9% last year. When news of Ghosn’s arrest broke, a car dealer heard customers say they were worried about buying Nissan cars. Today, these concerns are not as evident as they once were, but Ghosn’s spiriting himself out of Japan brings public attention back to Nissan’s past.
“The market cap decrease of Nissan is more than $10 billion since my arrest,” Ghosn said in Beirut. The message: Nissan’s success was Ghosn’s making.
Some analysts question this assessment. “Ghosn doesn’t seem to understand that he is a reason why the Renault-Nissan-Mitsubishi alliance has fallen apart and has resulted in a fall in Nissan’s corporate value,” auto analyst Takaki Nakanishi said.
Ghosn is blamed for the paucity of new Nissan models in the Japanese market, the result of his decision to focus the company’s resources on building a presence in emerging markets. Group net profit is now projected to fall 66% in the year ending March.
Nissan is ramping up efforts to remake its operations. Most of the senior executives who worked under Ghosn, including former CEO Hiroto Saikawa, have left. Instead of having one charismatic leader, Nissan is now led by a group of executives, such as CEO Makoto Uchida and COO Ashwani Gupta. In reversing the investment drive of the past years, Nissan has decided to reduce its workforce by 125,000, 10% of the total.
“We will create an atmosphere where dissent and different opinions are encouraged,” Uchida said last month in announcing a new beginning for Nissan. But barely a month since the launch of the new leadership team, vice COO Jun Seki jumped ship, revealing how fragile Nissan’s new foundation is.
After the Lebanon news conference, Nissan workers expressed disappointment in their former chief.
“He didn’t seem sincere,” one said. Added another, “Maybe he should accept a trial in Japan.”
During the news conference, Ghosn criticized Japan’s legal system and asserted his innocence. Said a Japanese prosecutor, “He’s not qualified to talk about justice.”
A 50-something worker at Nissan’s Yokohama plant watched a TV broadcast of the conference. “It was incredibly disappointing,” he said, “and all the more so because I had great admiration for the take-no-prisoners way he led cost cuts” at Nissan.
Ghosn, the worker continued, “repeatedly tried to justify his running away, but running away is illegal, I didn’t see any amount of honesty in his words.”
During the news conference, Ghosn portrayed suspicions raised about him as the result of a coup masterminded by other Nissan management members. To this, the man said: “If he thinks he’s innocent, then he should squarely face his criminal trial in Japan.”
“I’m worried Nissan’s reputation or sales may be affected if this hullabaloo lasts too long,” another worker at the same plant, also in his 50s, said. Noting that some overseas media reports have been sympathetic to Ghosn’s assertions, he said, “Ghosn will continue to repeat his assertions for a while, and that could hurt Nissan’s reputation, then Nissan’s earnings could be hurt, and then it’s the staff on the ground that could take the brunt from wage cuts and downsizing.”
Most white collar workers entering Nissan headquarters in Yokohama on Jan. 9 remained mum regarding their former chief’s new conference. (Photo by Rie Ishii) Most white collar workers entering Nissan’s Yokohama headquarters building on Thursday morning ignored an approaching reporter.
“I can’t make any comment,” one male employee said, only acknowledging that he had watched the broadcast of Ghosn’s news conference.
But former CEO Saikawa questioned Ghosn’s motivations, suggesting that he fled “because he was likely to be found guilty in a trial in Japan.”
“It feels like we were betrayed by him again,” Saikawa said, apparently suggesting he first felt betrayed when Nissan’s internal investigation uncovered alleged financial misconduct by the former chief.
Speaking to reporters in Tokyo on Thursday, Saikawa said he struggled to understand Ghosn’s accusations during the news conference that Nissan executives plotted his ouster. “On what basis is he talking about a coup?” Saikawa said.
Tension with Renault was “a matter of opinion,” Saikawa said, adding that it was a “totally different issue” from the alleged crimes.