Carlos Ghosn: Nissan scandal slams brakes on cost killer's career

Superstar reputation in global car industry tainted by allegations of misconduct

Carlos Ghosn was, until Monday, a titan of the global car industry. The first person to lead two Fortune 500 companies at the same time, he also enjoyed an almost unique position as a foreign chief executive of a major Japanese company – even gaining the honour of a manga comic book version of his life and rice sculptures of his face in bento lunchboxes sold to Japanese businessmen.

Yet in a remarkable development which has shocked the automotive industry, Ghosn will now be dismissed by Nissan on Thursday after alleged financial irregularities. Nissan did not hold back in its statement on Ghosn, accusing him and a senior colleague of “significant acts of misconduct” including understating his pay to regulators and misusing company assets. Renault and Mitsubishi Motors, both of which Ghosn also chairs, have yet to respond.

The ousting leaves the Renault-Nissan-Mitsubishi alliance – the maker of one in every nine cars manufactured worldwide last year – without its totemic leader as the electric and autonomous car revolutions threaten to upend the business models of established car manufacturers.

carmakers compared

Born in Brazil in 1954 to Lebanese immigrants, Ghosn’s ascent to the pinnacle of the global car industry began in France, where he studied at the prestigious École Polytechnique in Paris before joining Michelin, the French tyre manufacturer. At 27 he was manager of a Michelin factory in France; at 36 he was chief executive of the firm’s North American operations.

In 1996 Ghosn (which rhymes with “cone”) was poached by Renault, where he made his mark with a deep restructuring – earning a reputation for a sleek but ruthless management style, and a nickname, “Le Cost Killer”.

He repeated the trick at Nissan after Renault took a 43.4% stake in 1999, slashing employee numbers but gaining a heroic reputation in Japan for the rapid turnaround. Mitsubishi, dented by a fuel economy fixing scandal, joined the alliance in 2016, creating the world’s top-selling passenger car manufacturer through linked shareholdings.

Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk

Yet Ghosn provoked ire as he gained the superstar salary to match. In 2016 he lost a vote on pay as the French government, a major shareholder, objected to a €7.4m (£6.6m) package. He also earned a 735m Japanese yen (£5m) salary from Nissan and 227m Japanese yen from Mitsubishi for the year ending in March 2018, according to annual filings.

Another pay vote at Renault this year narrowly passed, lessening some of the pressure on Ghosn as he was thought to be exploring a full merger between Renault and Nissan.

But thoughts of simplifying the unorthodox structure are now likely to take a backseat as the remaining executives deal with a plunging share price and start a long overdue hunt for a successor to one of the world’s most prominent businessmen.


Jasper Jolly

The GuardianTramp

Related Content

Article image
Nissan tries to bar Carlos Ghosn from Rio property over corruption scandal
The firm fears Brazil-born Carlos Ghosn may destroy evidence if granted access to the apartment by the courts

Simon Goodley

09, Dec, 2018 @7:46 PM

Article image
Who is Carlos Ghosn?
In Japan, the car industry titan gained superstar status for saving Nissan but his fall from grace has been steep

Julia Kollewe and Jasper Jolly

31, Dec, 2019 @9:14 AM

Article image
Carlos Ghosn says 'backstabbing' Nissan conspiring against him
In video message ex-chairman says he is innocent and talks of fears for company’s future

Justin McCurry in Tokyo

09, Apr, 2019 @10:41 AM

Article image
Nissan launches $90m lawsuit against former chairman Carlos Ghosn
Japanese carmaker seeking damages for ‘corrupt’ actions by ex-boss who fled to Lebanon

Jasper Jolly

12, Feb, 2020 @11:52 AM

Article image
Nissan board sacks chairman Carlos Ghosn after 'serious misconduct' claims
Ghosn was said to have enjoyed ‘too much authority’ during his time at the vehicle maker

Justin McCurry in Tokyo and agencies

22, Nov, 2018 @12:05 PM

Article image
Carlos Ghosn exit must not affect Nissan-Renault alliance, says Japan
Trade minister calls for alliance to remain stable and hopes companies can begin talks

Jasper Jolly

25, Jan, 2019 @8:59 AM

Article image
Carlos Ghosn sacked as Mitsubishi Motors chairman
Carmaker’s board follows Nissan in ousting executive after misconduct allegations

Justin McCurry in Tokyo and agencies

26, Nov, 2018 @10:09 AM

Article image
Renault refuses to remove Carlos Ghosn despite shock arrest
French carmaker Renault out of step with alliance partners Nissan and Mitsubishi

Jasper Jolly, Julia Kollewe and Graeme Wearden

20, Nov, 2018 @11:03 PM

Article image
Renault accuses Carlos Ghosn of violating company ethics
Investigation into former boss found ‘questionable practices’, French carmaker says

Jasper Jolly and Justin McCurry in Tokyo

03, Apr, 2019 @6:21 PM

Article image
Nissan investigated by SEC after Carlos Ghosn charges in Japan
Carmaker ‘cooperating fully’ with inquiry into whether it accurately reported executive pay

Jasper Jolly

28, Jan, 2019 @10:28 AM