GHOSN’S REPLACEMENT UNDER SIEGE
There’s internal strife over whether Saikawa is right man to fix Nissan, say sources
CARLOS Ghosn’s arrest threw Nissan Motor Co into a corporate tailspin with allegations of selfdealing, profligate spending and filing false statements. Now the carmaker’s profits are falling off a cliff, and successor Hiroto Saikawa may go down with them.
Troubled by slumping United States sales, ageing models and a product cycle that’s out of sync, the Yokohama-based company is on track to announce tomorrow its lowest annual operating profit in a decade, raising the possibility of a dividend cut.
The outlook for the current fiscal year to March 2020 probably won’t be any more promising.
Chief executive officer Saikawa
has yet to announce a turnaround plan since the arrest of former chairman Ghosn in November, and people familiar with the matter say there’s internal strife over whether he’s the right executive to fix Nissan.
Alliance partner Renault SA may not look too favourably on Saikawa’s reappointment if he continues to oppose a merger said to be backed by its own chairman Jean-Dominique Senard, who is also a Nissan director.
“A new management team and strategy may be the answer,” said Michael Dean, a Bloomberg Intelligence analyst.
“We do not comment on rumours or speculation. The company’s focus is on stabilising operations and strengthening its management structure, while addressing the weaknesses in governance that enabled this misconduct,” said Nicholas Maxfield, a Nissan spokesman.
A pending litmus test for Saikawa’s job security will come next month, when Nissan’s directors are set to formally adopt new corporate governance rules that include creating a more independent board.
In an extraordinary shareholders’ meeting held last month to remove Ghosn from the board, Saikawa was peppered with questions as to why he wasn’t stepping down to take responsibility for Nissan’s poor governance.
Saikawa said there were many ways to take responsibility and he believed the right thing for him to do now was to help Nissan rebuild, signalling his intention to stay on.
Even so, Saikawa needs Renault’s vote from its 43 per cent stake to back his reappointment, especially given that roughly half of minority shareholders have voted against his appointment since 2017.
While the French carmaker agreed in 2015 not to interfere in the appointment of top Nissan managers, Nissan’s financial weakness could give Renault an opening to push harder for a merger.
The list of potential replacements include chief operating officer Yasuhiro Yamauchi, who sits on the board of Renault. His recent promotion preserves management ties between the carmakers, who along with Mitsubishi Motors Corp form the world’s biggest car alliance.
A recent management shuffle also put the spotlight on executives who may also be in a position to lead the company.
Hideyuki Sakamoto, in charge of manufacturing and supplychain management, joined Nissan in 1980 as an engineer and has worked around the world, including the Nissan Technical Centre in North America, Nissan’s largest affiliate supplier in Japan and Renault in Brazil.
Jun Seki, formerly Nissan’s China chief, is now senior vicepresident overseeing “performance recovery”.
“Nissan clearly had very bad corporate governance and an atmosphere where few felt they could question Ghosn,” said Janet Lewis, an analyst at Macquarie Capital Securities (Japan) Ltd.
“His departure will enable them to reboot, but it will take time to put a strong management team in place.”