Ghosn builds his case as the market punishes Nissan

(MENAFN- Asia Times)

Carlos Ghosn agreed to a third interview with Asia Times keyed to publication in the translation of his book Le Temps de la Verité, or Time for the Truth, which he co-authored with French journalist Philippe Riès. The Engish edition is entitled Broken Alliances: Inside the Rise and Fall of a Global Automotive Empire. Published by Tanooki Press, it is now available for $18.68. A Japanese edition is scheduled to be launched by publisher Gentosha Inc on December 6, entitled 世界で勝てない日本企業, or Seikai de Katenai Nihon Kigyo Kowareta Domei. The price has not yet been announced. Below are excerpts from the September 30 interview.

Note that some of the Ghosn comments from this interview have previously appeared in other Asia Times articles:“Nissan blinks first in Tennessee Carlos Ghosn case ,” October 1;“Ghosn says Nissan directors have dirt on their hands ,” November 1; and“Three years on, Nissan's Ghosn coup stinks to high heaven ,” November 19. We are now publishing the full interview timed to the announcement of the release of the Japanese edition of the Ghosn-and-Riès book. Ghosn will speak via Zoom from Beirut about the book and other matters, many others, this coming Monday, December 6, to an audience assembled by the Foreign Correspondents' Club of Japan .

For Nissan, his willingness to speak about the coup that made him a fugitive doesn't come at a good time. Although finally profitable again – margins are still small – the automaker has seen its share price slide again in recent days.

Asia Times : What was your motivation for writing the book?

Carlos Ghosn : I conceived writing the book in May 2019. I thought I'd be in the nightmare of Japan's“hostage justice” system for years. The book was one way I could express myself without interference from the Tokyo prosecutor, who had indicated that he would bring new charges if I talked to the press.

AT : This was after the Tokyo prosecutors' office rearrested you in early April 2019, bringing new charges and obviously trying to silence you, when you tried to hold a press conference at the Foreign Correspondents' Club of Japan?

CG : Yes. When I started the project with Philippe, I didn't know I'd be back in Lebanon seven months later. For me, the book is the most important expression of how I view these events including the character assassination campaigns and bogus charges. That's how Broken Alliances was born. Beyond which, people are confused about the story – why this happened, who's winning, why all this destruction? Anyone looking at the story asks,“Who wins?” And when they don't find a winner, they say that whoever planned this is really stupid. The only people who seem to have won something are the old boys, the Nissan old boys, the prosecutors, and the nationalists in the Japanese government because somehow they extracted Nissan from de facto control of Renault.

AT : The French edition came out in November 2020. Since then considerable new information about your case and the circumstances surrounding it has become available.

CG : We made changes and adaptations with new revelations and facts. I have no doubt that at a certain point there will be a Broken Alliances II because every day that passes we learn still more new information. For instance, in September Nissan agreed to settle the class-action lawsuit in Tennessee. They agreed to settle after we asked for a very broad discovery of documents including documents from [Nissan's law firm] Latham & Watkins. That's why they offered a generous settlement of around US$35 million. They agreed to pay for both Greg [Kelly] and me.

AT : Does the Tennessee settlement exonerate you?

CG : I can't say. But again, they paid for everybody including Greg and me.

Note: The Jackson County Employees' Retirement System, the Michigan-based investor group that filed the claim in federal court in Tennessee in December 2018, originally named seven defendants. In addition to Nissan as a company, it named six executives including Ghosn, Kelly and Hiroto Saikawa, Nissan's CEO at the time of the November 19, 2018, sting operation against Ghosn and Kelly. For nearly three years until September, the automaker tried to blame Ghosn and Kelly for financial losses incurred by investors.

AT : Do you have plans to file any additional lawsuits in light of new evidence that has surfaced?

CG : We will, but we need still more evidence. Collecting information, collecting documents and collecting witnesses are essential.

AT : In the book, you identified six coup members – Hidetoshi Imazu, the statutory auditor who went to the prosecutors' office; Hitoshi Kawaguchi, Nissan's former government affairs executive; Hari Nada, who headed the CEO's office; Toshiaki Ohnuma, head of the Secretariat office; Saikawa; and Masakzau Toyoda, the ex-Ministry of Economy, Trade and Industry man. Isn't there a seventh, Motoo Nagai, who was working in the auditor's office with Imazu? He's the one who told Christina Murray to stop investigating Nada and then relieved her of her duties in the internal investigation?

CG : Nagai should be added to the list. I also think he participated in the character assassination campaign against me and manipulation of information [sent] to the board. Two people who have played a very dirty role on the board are still there – Toyoda and Nagai. The responsibility of this group of people inside Nissan, the prosecutor of Tokyo and the government of Japan for the demise of Nissan is huge. And it's not only Nissan. Look at Mitsubishi. Mitsubishi was in the middle of a recovery in 2017 and 2018. And look what happened to Renault.

AT : Yes, look: combined business and market cap losses of nearly $40 billion including $16 billion or $17 billion at Nissan. And in fiscal 2021, even though Alliance partners are back in the black, profit margins are still well below the industry average.

CG : But why did they accept the alliance in the beginning? In 1999, they [Nissan] brought Renault to the table because they were desperate and there was no other solution and because their two previous turnaround plans had failed miserably. They brought Renault to the table because they couldn't fix the problems by themselves. Nissan was a broken company in 1999 and was expected to collapse. And then 18 years later, when they thought they could manage the company without the influence of Renault, they tried this. Unfortunately, as we know, it's not going well. Again, between 1999 and 2018, myself and my team brought Nissan back to life, created excitement around it, created new products. We started innovating in technology with electric cars. We started autonomous cars. We started a massive offensive in China. When I left the CEO job in 2016, there was more than $20 billion in cash. Also in 2018, Nissan was part of the number one automotive group in the world. That group was very original, a combination between Mitsubishi, Nissan and Renault. I'm not saying we were done, but we were in a much better situation than when I started.

AT : In fact, you mentioned in your book that your arrest ended talks about a possible merger with Fiat-Chrysler Automobiles, which would have brought Jeep, and Dodge trucks, to Nissan's and the Alliance's product lineup in North America.

CG : Yes. And now, looking at 2021, I don't understand the vision and where Nissan is going. The company is becoming mediocre and boring. It's back to where it was in 1999, and the Alliance doesn't make sense anymore. If they're not working together, why have this cross-shareholding? Why immobilize all that money to own another company's shares if they're not working together to provide synergies. But that's where they are today. A lack of imagination, a lack of vision, a very political organization trying to justify everything they've done.

AT : Do you think Nissan can lead any more? Look at electric cars where Nissan was once the world leader. It's not anymore.

CG : The future will determine whether they'll be a leader. But you can't manage a company by consensus. You need to make choices, and choices mean that at a certain point you need to decide what you want to do or not do. You also need a vision of the industry – where the industry is going. Frankly, I see nothing serious being articulated by the current management about the car of tomorrow or the technology of tomorrow. They're retreating on all fronts.

AT : In what way?

CG : Take North America. Nissan has argued that we were too aggressive [in going for market share] and that's why profits have fallen. But who was in charge in North America? José Muñoz. Where is he today? He's heading Hyundai? Where is he heading Hyundai? In North America. When you look at Hyundai, both in terms of market share and profit, they're giving a lesson to Nissan in how to manage a business in North America. Look, I left the CEO's job in 2016. [Saikawa became co-CEO in October 2016 and then CEO in April 2017 when Ghosn became chairman.] We're now in 2021. That's five years and they still talk about my management. The CEO should be looking ahead, not looking backward, and he should have his own ideas and not position himself to the ideas of his predecessors. Talking about rightsizing, for instance, doesn't make sense. The job of any CEO is to grow his company. This is without any doubt – growing it in a profitable and harmonious way, which is what I did for 18 years. The fact that they are not able to do it anymore is not a question of strategy. It's a question of execution. It's a question of vision and quality of execution.

Note: Although finally profitable again – margins are still small – the automaker has seen its share price slide again in recent days.

AT : And there's been a clear brain drain and, I realize this is controversial to say, but it is essentially a non-automotive board now. They've got seven outside directors, a majority, with little or no experience in the auto industry. One came from Michelin, but the rest, nothing discernible.

CG : When people tell me,“Mr Ghosn, you didn't do a good job because when you left everything crumbled,” I tell them … a lot of good people left with me.” José Muñoz left for Hyundai and Thierry Bolloré for Jaguar. I can give you more names who left to take prominent positions at other OEMs or suppliers. They left because they didn't want to get into politics. They just wanted to manage companies. In large companies, performance rests on the good communication and good work of a team of critical people. And these critical people – maybe 10, 12 or 15 – work together to ensure that the platform on which the company is based is very solid. If eight or nine of these critical people leave, the company is lost. And it takes a lot of time to reestablish this team.

Note: In total, our reporting indicates that an estimated 40 people in senior management – from José Muñoz (see postscript below for his comments), a member of the board and executive committee and at the time reportedly under consideration as a possible successor to Ghosn, down to senior executives at Nissan subsidiaries – left the company after Ghosn's ouster.

AT : Was Greg Kelly one of those“critical people”? You mentioned Muñoz, Daniele Schillaci, who headed global marketing and sales, and Christian Meunier, former chairman of Infiniti, now head of Jeep at Stellantis, in a section titled“The Purge.” In fact, I think the section on Muñoz tells an extraordinary story, that Nissan appears to have been targeting him as well. [See below.]

CG : Of course Greg is innocent of all those charges, but I don't want to create anything that could make his case more difficult. I have a lot of respect for Greg, always have. I trust him. He's a great professional. He's a very honest and authentic person. I am sure he is suffering for telling the truth, which makes him much more respectable. I respect his integrity, and, in my eyes, he was one of the most valuable persons in the company.

AT : Shifting focus to Hari Nada, who headed the CEO's office and is clearly the principal organizer of the sting operation which entrapped both you and Kelly: Apart from the fact that he committed a crime – his plea bargain was confirmed during Kelly's trial – you characterized him as a“whistleblower” in your book. I don't think that's a correct characterization. He broke the law.

CG : What he did, particularly to Greg Kelly, is despicable. But in addition to Nada, these people manipulated the Japanese legal system. They knew that the prosecutors' rate of success is more than 99%. They knew that by getting the Tokyo prosecutor involved they were practically assured of success with their plan. And with the support of nationalists in the Japanese government they knew, as it turned out in the end, that not a single Japanese executive suffered any consequence. Ironically, the only person who paid a small price was Saikawa, who lost his job as CEO. But even then, it was Greg [through a Bungei Shunju magazine interview in June 2019] who drew attention to Saikawa, not anyone on Nissan's board, even though they knew the facts. They thought they would get away with it. They thought I would stay in Japan forever. Things turned out differently, as you know, and I will pursue this as long as there is life in me to make sure that the truth gets out.

AT : I believe you are aware of Ravinder Passi's whistleblower memo in which he – in his capacity as Nissan global general counsel, Nissan's top lawyer – informed the outside directors at the September 2019 board meeting of serious problems with the internal investigation that had been headed by Christina Murray . Essentially, he blew the whistle on Hari Nada, and the board ignored him . Do you think they sold out?

CG : They knew that not a single Japanese executive received any consequences. They have dirt on their hands because they sat there when they could have spoken. They let an injustice take place and didn't do their job to protect the interests of the shareholders, the company and the brand. So yes, they sold out. You know it's amazing how they contradict themselves. Nissan and the prosecutors and Nissan were after me in Oman [for dealings with Suhail Bahwan Automobiles and its CEO, Suhail Bahwan]. Yet they still work with that distributorship. In fact, they signed a new multi-year contract. That's what they've done.

AT : Yes, it seems a bit strange. One final issue: Could you discuss your life in Lebanon a bit, how you fill your days?

CG : I am involved with many activities including my work at the university [Holy Spirit University of Kaslik, north of Beirut, where he reportedly helps develop business programs]. Obviously, I spend time with my lawyer to work on my cases. I have some businesses I'm following including startups that I'm investing money in while also helping other people. I spend time writing books and contributing to documentaries and movies. I take care of myself and train physically. I bike. I do a lot of things because I now have time to do them. That part I'm enjoying. Of course, my life is much better than what it was. But it's obviously not as good as it could have been if we could have avoided all this story. But clearly, I can do things I want to do because the life of a corporate executive at my level was full of obligations. I'm not complaining. I liked what I was doing. I enjoyed it. But I appreciate the fact that I can now do things like having breakfast with my wife because, before, there was always an airplane [to catch]. I was always in a hurry. I'm now able to see my loved ones as much as I want. I can spend time with my children. I have time to read. Of course, I can't travel anymore. A lot of people think I'm miserable because of this. Not at all. Obviously, I would like to be free to travel, and this is probably the longest period in my life when I haven't taken a plane. Since arriving in Beirut, it's now more than 22 months.
But in terms of health, sleep and my physical condition, in terms of being able to appreciate … the seasons because I am not going from one continent to another continent, this is all new for me.

AT : And do you expect Interpol to lift its red notice?

CG : I'm trying to fight it. Interpol, as you know, is not the police by themselves. They transmit instructions that the various countries send to them. But Interpol has rules and, unfortunately in this case, they are not respecting their own rules because they're not supposed to issue a notice when there are human rights violations or when the case is dealt with outside the legal system. They're not supposed to handle a case when there is discrimination. There are many, many matters in my case that would justify Interpol just dropping the red notice. But they're not. I'm going to fight it. But we have to fight it through the law.

AT : Thank you.

José Muñoz, regarded as a Ghosn ally on Nissan's board, left the automaker on January 11, 2019, less than two months after Ghosn's arrest, incarceration and removal from management at Nissan. He left Nissan after being warned by his attorney not to return to Japan for fear he could be next on the Tokyo prosecutors' office's list for possible arrest.
Muñoz, who was both a board and executive committee member while heading seven global business units, joined rival Hyundai Motor Company three months later, on April 18, 2019, as chief global operating officer. Then from May 2019, he was named president and CEO of Hyundai Motor North America and Hyundai Motor America. His comments quoted on pages 87-88 of Broken Alliances are noteworthy:

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