NISSAN SACKS CHARIMAN OVER MISCONDUCT
TOKYO/SINGAPORE: Carlos Ghosn was dismissed as Nissan Motor Co. chairman three days after his arrest on allegations of financial misconduct, marking a stunning fall from grace for an executive who had gained a cult-like status leading a global car alliance.
Nissan’s board voted unanimously to remove the manager from his post, it said after a meeting that lasted into the Tokyo evening. At the same time, the panel pledged continuity by saying its alliance with Renault SA won’t change. But in ousting Ghosn, the Japanese side chose a more aggressive path than their French partner, which had opted earlier to appointed only an interim leader for Ghosn’s post and had asked Nissan to do the same.
The removal fundamentally alters the balance of power at the companies that Ghosn steered. Nissan chief executive officer Hiroto Saikawa is emerging as a driving force behind the investigation, while the French side has appeared blindsided by the rapidly unfolding events. Ghosn had planned to cement the alliance via a full merger of Nissan and Renault, a move resisted by Saikawa, who may instead seek to improve the Japanese bargaining position in a partnership he says has for too long favoured the French side.
“It’s a coup,” said Tatsuo Yoshida, an analyst at Sawakami Asset Management, who used to work at Nissan. “Ghosn’s era is over.”
Ghosn, 64, is set to officially remain a director, since a shareholder vote is needed to remove him from the board completely. The Japanese carmaker won’t nominate an interim chairman, and its three independent directors will nominate a permanent chairman later on.
GHOSN, 64, IS SET TO OFFICIALLY REMAIN A DIRECTOR, SINCE A SHAREHOLDER VOTE IS NEEDED TO REMOVE HIM FROM THE BOARD
Speaking to reporters after the meeting, Saikawa said that stabilizing the current structure is the best way forward. The two sides are in close communication and will continue to be so, he said.
Without Ghosn at the head of Nissan’s board, a full-fledged merger looks unlikely. The charismatic French-Brazilian executive was architect and linchpin of the two-decade-old alliance, which was created to add heft against global rivals. Ghosn’s arrest has now laid bare resentments that have built as the Japanese and French sides alternated successes and struggles over the years.
Lately, the structure has become increasingly controversial in Japan due to Nissan’s strong financial performance. Although it’s generally outgrown Renault in sales and profits, the Japanese company has far less influence within the alliance. It owns a 15% non-voting stake in Renault, which in turn owns 43% of Nissan, with voting rights. Mitsubishi Motors Corp. was added to the alliance in 2016.
Nissan has long been unhappy about what it considers an outsize French role, and Saikawa made reference to that perceived imbalance at the late-night press conference he called on Monday to respond to Ghosn’s arrest.
The French side, conversely, has been keen to maintain—if not intensify—the current relationship. French finance minister Bruno Le Maire said on Wednesday that the partnership is set to continue and will be deepened. As Renault’s largest shareholder, the French state is “totally attached to the alliance of Renault and Nissan”, he said.
The unanimous vote means the former Renault executives on the board also backed his removal. The French carmaker itself put in place new interim leadership earlier this week but declined to fire Ghosn, saying he should be presumed innocent until more details become available.