- C​arlos Ghosn

Carlos Ghosn is the most wanted man in the entire automotive industry, both during is professional rise, and later in life for not entirely positive reasons. Ghosn recently escaped house arrest in Japan whilst awaiting trial for major financial misconduct. Lets look at why Ghosn suffered such a spectacular fall from grace as a visionary automotive industry leader.

It is claimed that Ghosn pulled a Harry Houdini style trick by leaving Japan in double bass case used for a musical instrument. Welcome to the bizarre story of Carlos Ghosn

Ghosn is a Brazilian native and the chief architect behind the Renault-Nissan-Mitsubishi alliance, an automotive powerhouse that includes brands such as Alpine, Infinti, Dacia, Renault-Samsung, Datsun, Venucia and Lada. They are a pretty big deal. Ghosn also has a collection of accolades to his name, including entries to the Automotive Hall of Fame, first foreign business leader to receive a Blue Ribbon medal in Japan, fluent in 4 languages although just proficient in Japanese and holds citizenship of Brazil, France and Lebanon.

W​here did it all begin?

Carlos Ghosn was born on March 9 1954 in Porto Velho, Brazil to parents of French-Lebanese origin. He spent much of his early childhood sick with from unsanitary warter consumption then at the age of 6 his family had moved to Lebanon has healthcare was significantantly better than in Brazil. He remained in Lebanon until becoming a teenager when he and his family moved to France to complete his high school. Ghosn was academically bright as he went on to complete a university degree as an engineer at Ecole, one of France most prestigious high education universities.

M​ichelin tyres

M​ichelin tyres

His engineering degree primed him for a role within the automotive industry, he secured himself a graduate job in the French tyre manufacturer, Michelin, the same Michelin who award stars to the worlds best restaurants. Though initially Carlos Ghosn was employed within tyre manufacturing and design, he enjoyed a successful career at Michelin spanning 18 years which started in 1978. Carlos Ghosn started his career aged 24 and by the age of 27 Carlos Ghosn was head of the plant in Le Puy-en-Veley, a town who’s pronunciation I have butchered completely. 3 years later in 1984 Carlos Ghosn would be head of research and development for Michelins industrial tyre division. A position Carlos Ghosn held for a year before becoming the chief operating officer of Michelins entire South America division in 1985 aged 30. Back then the tyre company was struggling in South America with unprofitability, Carlos Ghosn was tasked with turning the companies fortunes in Latin America. Carlos' business acumen was quite apparent and within the span of just 2 years Ghosn had turned the company around to a profit making position. Carlos remained as the Chief Operations Officer for Michelin South America for an additional two years before being promoted to the same title, but this time in North America. In 1990 Carlos received another promotion which he now held the highest position in Michelin North America, the Chief Executive Officer which Carlos held until 1996 when he ended his 18 year tenure with Michelin tyres.

R​enault

R​enault

In 1996 following the privatisation of the French car manufacturer Renault, Carlos was appointed as the vice president. His duties meant he oversaw purchasing, advanced research engineering and development, powertrain operations and manufacturing as well as the entirety of Renaults South American operations. The company under the supervision of Ghosn saw the company make record profits in his first year as Vice President but his biggest business decision was yet to come and that would be in March 1997 with the formation of the Renault-Nissan alliance. Renault would purchase 36.8% of the Japanese car manufacturer which provided a much needed lifeline for Nissan as they were making losses on 43 of the 46 vehicles that they produced. With Ghosn Midas Touch Nissan were able to strike gold again as for the financial year of 2000 Nissan had made a 4.5% profit over sales which amounted to $2.7 billion. Prior to the alliance Nissan had lost $6.46 Billion in the previous year and by 2002 had decreased Nissans $20 billion debt by half to $10 billion. Enormous numbers for sure but it is incredibly positive for the company. His restructuring was ruthless in nature with the loss of 14,000 Japanese jobs and the selling off of Nissans Aerospace assets and other manufacturing plants.

His vision was clear, it was 180. 1 million cars sold per year, 8% profitability and $0 of debt by 2005 which was achieved in 2003 a real remarkable achievement by a true visionary. By 2005 global car sales were 3.67 million, profitability was 11% and the company had a positive balance sheet position. Absolutely shattering his 180 goal set back in 1999. His godly achievements saw Carlos be promoted to Chief Executive Officer roles of both Renault and Nissan. To put it in to a little bit of context, he was the first person in history to be the CEO of 2 separate companies in the world 500 largest companies at the same time.

He was a wanted man indeed, General Motors wanted to merge with Renault and Nissan and appoint Ghosn as their Chairman. Ford motor company wanted him too to be their CEO. Carlos Ghosn refused their offers as he wanted to bring vehicle ownership to the worlds masses. He wanted to bring vehicle ownership to the worlds developing countries and he wanted them to be zero emissions. Ghosn foresaw the future and he foresaw that it was electric. This was all at a time before Tesla. In the midst of a global recession the alliance went big on electric with their Nissan Leaf. The leaf is the global leader of electric vehicles in terms of sales.

Under Ghosn leadership throughout the 2010s the alliance grew. Renaults stake in Nissan had increased to 43.4%. The Japanese automaker Mitsubishi joined when Nissan purchased 34% of the company. It formally became known as the Renault-Nissan-Mitsubishi alliance. This alliance instantly became the 4th largest car making group in the world and Carlos was at the helm. The company as in 2019 sold nearly 11 million vehicles. Up 25% from a decade ago and 4 times what it was selling when the alliance begun back in 1999.

His interests were not solely within the automotive industry. Carlos Ghosn holds an advisory position in the Brazilian bank Banco Itau as well as for the Chinese university Tsinghua’s school of economics and management in Beijing and serves as a governor of the world economic forum.

Ghosn was on top of the automotive world or so he thought until the fateful evening as on 19 November 2018 as at 4.30pm Ghosn was arrested at the airport upon arrival by Japanese police and called in to questioning over accusations of false accounting. His colleague Greg Kelly who is head of human resourcing was also arrested. A Nissan Japan executive, Hiroto Saikawa, called a press conference that day and had announced the Ghosn had been dismissed from the Nissan-Mitsubishi arm of the alliance in a coup like fashion with all executive rights to be stripped by 22 November 2018. During the press conference Saikawa stressed the Ghosn's dismissal was entirely due to an internal inquiry.

It is alleged that Ghosn and Kelly underreported their compensation earnings and that they were using company funds to hide personal payments that included investments such as an extensive property portfolio valued in excess of $18million, family holidays, all of which that was purchased through a shell company based in The Netherlands, a known tax haven, dating back from 2010. All in all the alleged corporate frauds amounts to $80million. Allegations that Ghosn denies. There were some leaked documents a few years prior that claimed the Ghosn had been planning on firing Saikawa. It could be suggested that Saikawa had a personal vendetta against Ghosn though that can’t be proved as there are some fishy circumstances around the financial arrangements set up by Ghosn, as Ghosn is alleged to have set up companies under the alliance that he had full controlled over.

Carlos Ghosn was released mid December 2018 as part of a plea bargaining deal only to be arrested a few days later on 21 December when new allegations and charges arose. On the day of his scheduled release from prison on 11 January 2019 he was charged with aggravated breach of trust and understating his income for his involvement of the draining of a CEO rerserse fund being spent on unauthorised expenditure in a Saudi Arabian aerospace company. Nissan's internal investigation alleges that Ghosn paid himself an additional $8million via the Dutch shell company set up with his sole authority.

The scandal got the French government sweating as they saw themselves implicated in the mist of a diplomatic disaster. They stepped in and asked for bail for Ghosn which the Japanese authorities had refused and by 24 January 2019 Ghosn was formally out of the entire alliance as he voluntarily resigned from Renault.

T​weet written by Ghosn

T​weet written by Ghosn

Changing his legal team Ghosn posted a $9million bail and was released on 6 march 2019 he was placed on house arrest under 24 hour surveillance and no internet access. Bail conditions were breached on 3 April via twitter as Ghosn tweeted “ready to tell the truth”. Carlos Ghosn was promptly re-arrested on 4 April over alleged financial dealings in Oman. Ghosn claimed in a youtube video that he is “innocent of all the accusations that came around these charges that are all biased, taken out of context, twisted in a way to paint a personage of greed, and a personage of dictatorship”. He claims the payments to the Saudi Arabian Aerospace company were a way to set up a method to receive his salary in USD as opposed to Japanese Yen. He was released again on April 22 on a 4 month house arrest with no contact with his wife, Carole.

M​acron and Abe

M​acron and Abe

Ghosn's troubles were not limited solely to the criminal investigations in Japan as in June 2019 Ghosn was now being investigated by the French state as an audit of Renaults financials uncovered €11million of questionable expenses related to Ghosn. A month later in July, Renaults headquarters were raided, the month also saw Ghosn attempt to sue French mass media for libel. In August, Ghosn's wife Carole pleaded with the French president Emmanuel Macron to intercede on his behalf to Japanese leader Shinzo Abe at the 45th G7 summit held in France from August 24 to 26 2019. Then in September Ghosn was fined $1million in the US for claims relating to failing to disclose payments from Nissan of over $140million. As a result he was barred from holding office of a public company for 10 years.

T​he escape from Japan that seemed to be a plot from a Hollywood movie

On the 30 December 2019 media started to report that Ghosn had fled Japan for Lebanon whilst hidden in a case designed for a musical instrument. It is believed that Ghosn had travelled to Turkey before boarding a flight to Lebanon. 4 pilots were subsequently arrested for assisting in Ghosn escaped. Japanese authorities claim that Ghosn left freely of his own accord. The truth is yet to be revealed. Ghosn confirmed the reports via a press team based in New York. In his statement Ghosn said that he is “no longer held hostage by a rigged Japanese justice system where guilt is presumed, discrimination is rampant and basic human rights are denied”. and that he “escaped injustice and political persecution”. Upon arrival to Lebanon, Japanese persecutors revoked Ghosn bail. There is no extradition treaty between Japan and Lebanon but both countries are members of Interpol, International Police. Interpol issued a red warrant for Ghosn arrest. A red warrant is issued to seek the arrest of an individual awaiting for trial with the view to extradite them to face justice.

Ghosn intends to hold a press conference on 8 January 2020.

Ghosn meteoric rise was followed by equally large fall from grace. It leads to many questions. What is going to happen to the alliance? Will Ghosn find himself living the rest of his days in jail?

Loading...

We can’t predict the future but it has been one hell of a ride. Thank you for reading

New Love food? Try foodtribe.

Join in

Loading...
Comments (5)
    Loading...
    Loading...
Loading...
Loading...
Loading...
5
Loading...