Civil War Erupts As Nissan Renault Mitsubishi Empire Begins To Fall Apart
Having worked for a blue-chip Japanese company in a senior position (before I joined this wreck of a pirate ship), I can tell you the one thing the Japanese admire is humility. The news of the corrupt CEO of this Franco Japanese, Nissan Renault & Mitsubishi automotive alliance will be a shock to the Japanese system as well as a corporate shock.
Carlos Ghosn, the CEO of the tricolor alliance, along with his co-accused, Greg Kelly, was arrested on Nov 19 by Japanese authorities. The charges are systematic corporate corruption for personal benefit. The future of the Nissan Renault Alliance is uncertain.
One of the allegations made against Ghons was reported in the Wall Street Journal. Ghosn reportedly told colleagues that he had no need to inform regulators of a multi-million dollar compensation package to be paid when he retires.
By law, publicly listed companies have to declare financial transactions through either an annual report or direct to the authorities.
Such laws are designed to prevent corruption and also designed to ensure corporate or personal taxes are paid.
So Ghosn has effectively tried to dodge paying his personal taxes by hiding behind his corporation. This is a modus operandi usually favored by mob bosses.
Ghosn also faces other charges such as under-reporting his salary, which again is effectively another tax dodge. So Ghosn is in serious trouble with Japanese authorities.
However, his arrest and detention in Japan have sparked fissures in the Alliance that laid dormant for many years.
Nissan CEO Hiroto Saikawa has given a damning verdict on Ghosn saying the fallen CEO had too much power that was ripe for abuse in the wrong hands.
Saikawa said Ghosn had built up a cult-like status and concentrated power around him in what was an unbalanced Alliance. Nissan elected to remove Ghosn as chairman on Nov 22.
Mitsubishi followed suit. However, Renault stalled their decision, Ghosn remains at the CEO. A decision that will lead to corporate warfare for sure.
Nissan is a bigger corporate entity and sells more vehicles than Renault but only holds a 15% non-voting stake in Renault. Conversely, Renault holds a 43% stake in Nissan.
So, this bubble was going to burst but for now, the Alliance remains intact. However, it is a listing vessel sailing in calm waters without rigging or direction. Nissan is seeking to end the Alliance.
Nissan executives have long harbored a desire to break free of the “unbalanced” partnership.