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Ghosn from Nissan: from car industry icon to scandal


Elaine Ganley, The Associated Press

Published Monday, November 26, 2018 4:18 AM EST

PARIS – A trailblazer and visionary in the automotive industry, Carlos Ghosn is also a high-priced high-flyer who could have surprised him as the head of the best-selling car group in the world.

Ghosn returned to France with Renault SA and then with Nissan Motor Co. from Japan, eventually tying them in an alliance with Mitsubishi Motor Corp.

But while he was known as a cost cutter for the industry, he spent his luxury thanks to millions of dollars worth of salaries from Renault, Nissan and Mitsubishi. Ghosn's marriage in 2016, to the second wife of Grand Trianon in Versailles, once favored by Marie Antoinette, featured 18th-century clothing actors, a wedding cake and piles of food.

As a queen, the man once seen as the king among the industry directors in France and Japan has passed like a dying star.

Ghosn, aged 64, was arrested in Japan on November 19 for faking financial reports and misappropriating funds at Nissan Motor Co. Prosecutors say he is suspected of having reported his $ 44 million incomes over five years. He is now in Spartan conditions in a detention center that holds and detained and recently hired the leader of the cult of Ms. Shoko Asahara.

No charges yet, and Ghosn made no public comment on this case, but last week, Nissan's council, through a unanimous vote, ended its 19th anniversary as president. The French Council of Administration, Renault, voted to keep him as CEO, pending evidence of the case, but called a temporary replacement. Mitsubishi Motors' board of directors was due to meet on Monday to consider whether to dismiss him as president.

Ghosn is admired in Japan for bringing Nissan back from the brink of bankruptcy, but he feared his cost-killer ways. He started at Nissan, focusing on thousands of jobs and closing plants in an unpleasant country to give up lifetime employment.

For nearly two decades, Ghosn has sparked Nissan's corporate culture, empowering women in managerial roles and improving the design and marketing of cars. He stopped paying gangsters of extorted shareholders, known as "sokaiya," a courageous move, which meant that he needed extra security.

Having a salary a few times smaller than that of Toyota Motor Corp's rival president, Ghosn was in a nation of "salaried" presidents, even top companies, earning mediocre pay to finish the world's careers. Signaling his status as an icon, he is the star of a manga or a comic book.

Nissan managers have credited Ghosn, working hard, listening and directing staff to meet their well-defined goals. He has made a point of showing respect for Japanese culture, who shows up in kimono, visits factory floors, and eats noodles at company canteens.

But he also spent a lot of time jamming privately through time zones and cultures, attending large-scale events such as the annual eve of the world's elite in Davos, Switzerland, the red carpet of the Cannes Film Festival, .

His business concept and celebrity have brought him rock star status to car shows. But it also stirred the resentment among Nissan, said an employee who speaking on the condition that her not being called yet described Ghosn as a great boss: precise, communicative and even temperate with a sense of humor.

Accusations against Ghosn have been reported in Japanese media but unconfirmed, suggesting that he spent Nissan funds on luxury homes in Paris, Beirut, Rio de Janiero and Amsterdam, as well as on family vacations and other personal expenses.

Nissan Executive Director Hiroto Saikawa presented his boss's unhappy conduct as a betrayal, saying he has too much power and gave too much confidence to Nissan's success.

"It's hard to put in words, but what I feel goes far beyond the remorse of indignation," Saikawa told reporters the evening after Ghosn's arrest.

Born in Brazil, where his Lebanese grandfather sought his fortune, Ghosn returned to Beirut as a child. A Christian maroon, he received a rigorous Jesuit education, then went to France for higher education at Ecole Polytechnique and Ecole des Mines.

It began in the automotive industry that works with tires. In the mid-20s, Ghosn was running a Michelin factory in the center of France before taking over the task of South American operations in Brazil. He was the CEO of Michelin North American operations, based in the US, before moving to Renault SA.

In 2006, Britain gave him an honorary knight.

Lebanon, proud of its success, issued a commemorative stamp with its resemblance last year. In France, where the government has a stake in Renault, he has often met with top leaders.

Ghosn has created much success in terms of his multicultural origin and a permanent "outside" identity that freed them from breaking tradition: an autobiography in 2003, one of his books, is titled "Citoyen du Monde" or "Citizen of the world."

"It helps you come from outside because people do not see you as anyone else involved in making the previous decisions," Ghosn said in a 2005 interview with The Associated Press. "Helps when the company is in crisis".

With so little information disclosed as prosecutors questioning Ghosn and deciding whether to accuse him, some believe the scandal results partly from the friction between Renault and Nissan: French media have suggested Ghosn's arrest was a set led by Saikawa.

The French government has expressed its deep concern about the future of the Renault-Nissan alliance, which it wants to deepen.

These strains were evident in a siren cast by the French ambassador to Japan in Tokyo on Ghosn's arrest night. Former Renault president Louis Schweitzer, who sent Ghosn to Tokyo in 1999 to save Nissan, was among those present, writers at the Nikkei Financial newspaper who attended the event.

The glasses of champagne shuddered, but the ambience was bleak.

With the industrial sales of the Renault-Nissan-Mitsubishi alliance, it would be tragic if the ongoing scandal undermines Ghosn's legacy of diversity and globalization, said Janet Lewis, chief executive and chief industrial research at Macquarie Capital Securities in Tokyo.

"It has made it very difficult for an intern to do it," she said. "Given the multinational nature of Nissan's leadership team, which I admire very much, I think it's probably done a pretty good job of working together people with very different backgrounds."


Yuri Kageyama of Tokyo, Elaine Kurtenbach of Bangkok and Zeina Karam of Beirut contributed.

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