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Ghosn scandal can affect the Renault-Nissan alliance to the breakpoint

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By Paul A. Eisenstein

After Nissan’s Board unanimously voted for Carlos Ghosn as chairman at an emergency meeting at his headquarters in Yokohama, Japan, some industry observers are asking exactly what the case really means.

The Nissan French Alliance Partners Board of Directors Renault has chosen not to abandon Ghosn as its own CEO while waiting for clear evidence. Several sources told NBC News, they questioned why Ghosn was even arrested.

The 64-year-old executive was arrested on Monday in Japan and accused of under reporting his income by nearly $ 45 million and abusing the company’s assets. The Brazilian born executive may remain in prison in Tokyo for as much as ten days before the prosecutors decide to make a formal prosecution.

This could mean a “lethal jetty of politics and international business”, says Joe Phillippi of AutoTrends Consulting. While warning that it could be “a distance” he quickly added that it was not “out of order” that the charges such as Ghosn’s level were motivated by an internal business conflict.

It was echoed in half past two conversations with them within or near Nissan, with sources related to a sharp outcome between Ghosn and Saikawa, who replaced Ghosn as Nissan CEO last year.

“Companies can usually give you a blow on your hand” when you play a little loose with things like a business jet or take out things in your expense account that are not eligible, “says a Nissan veteran,” but they do not have their chair arrested and imprisoned. “

If the case is not rock-fast, some industry watchers may forecast Saikawa to be forced out of its own. Nissan’s president clearly seemed to be sure of the allegations that reached Ghosn during a press conference at the headquarters on Monday and explained: “In addition to being sad, I feel great disappointment, frustration, despair, anger and anger.”

But he may also have signaled a personal element in the matter by suggesting that Ghosn had received too much power and may have stayed in his position for too long.

Ghosn joined Renault in 1

996 and boarded to fix the French company’s finances. He puts it in black for almost a year and earns the nickname “Le Cost Killer”. Ghosn was then sent to Japan in 1999 after Renault bought a 38.6 percent stake in Nissan to implement a comprehensive turnaround plan. Originally named Chief Operations Officer, Ghosn was soon raised to CEO after the Japanese car manufacturer started making a profit and had slashed its degrading debt. He was then appointed as Executive Director of Renault and held the same position at the umbrella organization now known as the Renault-Nissan-Mitsubishi Alliance.

In their various posts, Ghosn not only had to handle a remote business empire but also the political pressure associated with the French-Japanese group. In 2017, the French government trimmed its holdings in Renault – partly due to the maneuvering of Ghosn – to 15 percent. But it still has significant turn and has pushed to further consolidate the Paris based automation and Nissan, something that French finance minister Bruno Le Maire pointed out this week.

Nissan has ever printed a little more independent under Saikawa. But Reuters quoted company sources suggesting “There is a sense of crisis at the Japanese Ministry of Economy, Commerce and Industry that at this rate, Nissan and Mitsubishi will be seized by the French government.”

Some observers warn things could go in the other direction for the alliance if the French press is too difficult – or the Japanese maneuver too aggressively to prevent a takeover.

Earlier this week, Mamsubishi CEO Osamu Masuko said the alliance that Ghosn is gathering together is in danger. “I do not think there’s anyone else on earth like Ghosn who could drive Renault, Nissan and Mitsubishi,” he said.

Those on both the French and Japanese side of the alliance have tried to put down such worries. Saikawa expressed its wish to maintain what has been a massive positive relationship that last year passed Volkswagen to become the world’s best-selling vehicle group according to its volume.

Although on the Renault side they continued to claim evidence of Ghosn’s alleged crimes. The company also issued a statement that emphasized its commitment to defending Renault’s interest in the alliance.

“But there is no doubt that the loss of Ghosn will be a big challenge. He is” glued to Renault and Nissan together, “said Max Warburton, an analyst at Bernstein.” It’s hard not to conclude that there may be a gap between Renault and Nissan. “

Should further questions be raised about the narrative of Nissan’s accusations and Ghosn’s arrest, several sources warned that this gulf could become a sea. And it could add another

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