Father of Nissan’s Leaf arrested
Kim Hjelmgaard and Nathan Bomey.
Japanese automaker Nissan Motor Co’s influential chairman Carlos Ghosn has been fired and arrested after an internal probe found he under reported his salary and for other financial violations, including the personal use of company assets.
Nissan said in a statement that Ghosn would be dismissed after an internal probe based on a whistleblower report found he falsified reports ‘‘over many years’’.
Japan’s state broadcaster NHK said Ghosn was later arrested on suspicion of financial misconduct.
The news was announced after Japan’s financial markets closed, meaning Nissan’s Japan-listed stock price was not immediately affected.
However, shares in French car maker Renault, Nissan’s longtime partner, fell 14 per cent in European trading, to 55.61 euros – the largest drop in more than three years.
Brazilian-born Ghosn, 64, is a huge figure in the global auto industry. He was an early advocate for electric cars, autonomous and driverless vehicles, and for integrating communication capabilities with smartphone technology for the ‘‘connected car.’’
Ghosn helped turn around Renault and Nissan and pushed them into electric cars. Ghosn is chairman and chief executive of the Renault-Nissan-Mitsubishi alliance and chief executive of Renault.
More than a decade ago, Ghosn was a central figure in a proposed three-way alliance between General Motors, Renault and Nissan.
The failed globe-spanning partnership would have created the world’s largest car maker, currently Germany’s Volkswagen.
Renault was not available for comment on the allegations.
Another senior Nissan executive, American Greg Kelly, was also dismissed. Neither Ghosn nor Kelly could be reached directly for comment.
‘‘The investigation showed that over many years both Ghosn and Kelly have been reporting compensation amounts in the Tokyo Stock Exchange securities report that were less than the actual amount, in order to reduce the disclosed amount of Carlos Ghosn’s compensation,’’ Nissan said in its statement.
‘‘Also, in regards to Ghosn, numerous other significant acts of misconduct have been uncovered, such as personal use of company assets, and Kelly’s deep involvement has also been confirmed.’’
The fall for Ghosn – whose charisma, globe-trotting persona and industry gravitas once inspired a Japanese manga comic book about him – left the auto industry gasping.
‘‘Ghosn is a giant in the industry,’’ said Michelle Krebs, an analyst at Cox Automotive’s Autotrader. ‘‘He’s a giant on the global business stage.’’
Although investors were concerned Ghosn’s dismissal could mean Nissan faces financial problems, Sanford Bernstein auto analyst Max Warburton said it’s more likely the accusations pertain to Ghosn’s personal conduct.
As a leader of three companies at once, Ghosn successfully pressed the global alliance of Nissan, Renault and Mitsubishi to challenge Volkswagen Group and Toyota Motor for the title as the world’s largest automaker.
He promoted collaboration among the alliance partners to save on vehicle costs.
In doing so, he entertained the prospect of an outright merger at one point, but political realities made it infeasible, he eventually concluded.
Among them: The French government owns a large stake in Renault and is unlikely to cede control to the shareholders of more-profitable Nissan.
Now, with Ghosn ‘‘defenestrated’’, the alliance’s future is suddenly in jeopardy, Warburton wrote this week in an investor note.
‘‘It is hard not to conclude that there may be a gulf opening up between Renault and Nissan.
‘‘Perhaps the Alliance will be fine without Ghosn – his importance may be overstated. Or perhaps it will come apart at the seams.’’
One of Ghosn’s signature moves was his aggressive pursuit of sales volume, sometimes at the expense of profitability and quality.
He wanted to make Nissan one of the largest automakers in the US, but his successor as chief executive of the Japanese automaker, the recently installed Hiroto Saikawa, publicly questioned the brand’s strategy of heavily discounting vehicles for Americans. – TNS