The harakiri of Carlos Ghosn

Let me start by saying that Mr. Ghosn is innocent until proven guilty.
by Dan Azzi

21 November 2018 | 12:35

Source: by Annahar

  • by Dan Azzi
  • Source: Annahar
  • Last update: 21 November 2018 | 12:35

Carlos Ghosn is credited with helping engineer a remarkable turnaround at Nissan over the past two decades. He served as Nissan's chief executive from 2001 until April 2017. (AFP)

BEIRUT: I met Carlos Ghosn last month at a Columbia University pan-European conference in Paris. He was the keynote speaker and truly lived up to his reputation. He was sharp, focused, and courageous. In fact, he came up in one of my articles, in which I stated that he had identified himself as Brazilian in this conference with nationalities from every corner. He was introduced by the host as French, but his Lebanese heritage never came up. That article had the usual minority of blindly patriotic criticism and an argument ensued as to his ethnicity. The three countries, at least last month, were all vying to claim him. No longer today.

Let me start by saying that Mr. Ghosn is innocent until proven guilty. There has been no trial, no defense, and no conviction. At this point, all we have are allegations.

In my opinion, there are two ways this can pan out. One is that he is guilty of some or all of the allegations. Normally, in cases like this, his lawyer will negotiate some sort of settlement and pay a huge fine, in return for something like ‘no admission of wrongdoing’ and minimal jail time, or as close to that as he can get, depending on the strength of the case against him. The other possibility, of course, is that he is found not guilty.

In either case, I believe that this was more of an internal power struggle — a coup d'état on the Japanese side, if you will. We know that this started with a whistleblower, i.e. an internal leak to the authorities. Today’s Financial Times of London reported that “Ghosn had been planning a merger between Renault and Nissan ... which Nissan’s board was looking for ways to block.” In any such merger, Renault would have the upper hand, which Nissan’s board opposed “fiercely.” The FT adds “Strains between Mr Ghosn and Mr Saikawa intensified as Mr Ghosn became increasingly displeased with the performance of the Japanese group, which has seen profits fall on declining margins in the US and slowing growth in China.” We also know that the Japanese CEO of Nissan, Saikawa-San came out in a press conference and said, “I feel strong anger and despair,” and then, according to the Wall Street Journal, he proceeded to outline a “broad critique of Mr. Ghosn’s time at the helm and rejected the view that Mr. Ghosn deserved the main credit for Nissan’s recovery.”

As a former CEO myself, I can tell you that it’s highly irregular for someone to slam his boss publicly, a few days after such an incident, especially if he’s yet to be tried and convicted. Normally, the response would be something like, “We are sad about the developments and we will wait until the investigation is concluded” or “No comment.” As someone who studied Japanese for a year and lived in Japan for a total of six months, on two occasions, I can tell you that this is especially true in the Japanese deferential, formal, and very private culture, at least in the business world. When Emperor Hirohito gave the radio address accepting the Potsdam Declaration surrendering to the Americans, he phrased it this way, "The war situation has developed not necessarily to Japan's advantage." Very different from Saikawa-San’s tone and content of his press conference. This is also in sharp contrast to the reaction from Renault or the French government, which are saying that they’re waiting for further clarification.

The Japanese culture has evolved massively from when I first lived there in 1995. Back then, bars in Roppongi, Tokyo had signs that said “No Gaijin (foreigners) allowed.” This was before the Facebook era, which would have sped up the removal of these signs, that had all but disappeared the next time I lived there, in 2006, when I ran the Japan trading operations for an investment bank. However, what hasn’t changed is the formality and respect for hierarchy, which makes Saikawa-San’s reaction so uncharacteristic of my experience there.

Meanwhile, in Lebanon, some colorful conspiracy theories are spreading. The main one making the rounds is that this was American payback for refusing to back down from selling cars and doing business with Iran.

Carlos Ghosn’s legacy is really about the alliance he constructed between the very French Renault and the very Japanese Nissan, two vastly different cultures. This was groundbreaking and his turnaround of both companies is legendary and will be a case study at top global business schools for decades. In Japan, he was such a luminary, that comic books were released with him as the hero, just like Superman or Batman.

Regardless of how this saga ends, what will always be true is that Carlos Ghosn is an automotive genius.

Dan Azzi is a regular contributor to Annahar. He has recently been invited to be an Advanced Leadership Initiative Fellow at Harvard University, a program for senior executives to leverage their experience and apply it to a problem with social impact. Dan’s research focus at Harvard will be economic and political reform in a hypothetical small country riddled with corruption and negligence. Previously, he was the Chairman and CEO of Standard Chartered Bank Lebanon

Show Comments

An-Nahar is not responsible for the comments that users post below. We kindly ask you to keep this space a clean and respectful forum for discussion.