business

Ghosn arrest shakes Franco-Japanese alliance

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By Anne Beade

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Resentment in the Tokyo press had already been brewing over the structure of the alliance, which they say gives French carmaker Renault an undue share of the Japanese company's profits.

Here's to all the folks that were making comments about it "not being about him being gaijin". It's all about him, he ain't Japanese, and there are evidently quite a few people out there with knives in their hands to assist in stabbing him in the back.

They dont care about the company, they care about their own damn pride!

8 ( +12 / -4 )

@Yubaru, YES. This is a well planned coup.

Unfortunately the alliance will be affected and Nissan brand will be questioned.

13 ( +13 / -0 )

Anybody who has prepared a tax documents or financial papers in Japan knows that the accusations against Ghosn are nonsense. Such kind of documents are prepared by company accounting departments and auditors. Add to that the complexity of his income from 3 companies, residences in different countries and 3 passports. As Ghosn doesn't read Japanese, he wouldn't even know where to put the numbers. This is political, a coup, to finally get rid of the foreigner who rebuild the company and made it successful.

13 ( +15 / -2 )

Can anyone really believe it's so far fetched that Japan Inc. decided that he crossed the line and this was the opportunity remove him?

9 ( +9 / -0 )

what are the odds of Nissan's return to bankruptcy and sold ?

4 ( +4 / -0 )

It's Nissan, short for 日本産業 (Nippon Sangyo) which means "Japan" Industries. As trivia as I might say, it's probably an embarassment that "Japan" Industries is headed by a non-Japanese, so this explains why things are moving so fast. Even in NHK news this morning, the group panel brought for live interview repeatedly referred to him as "gaikokujin" and they said that being a foreigner that has a different leadership style, there seems a resentment within the company and an internal coup is likely.

12 ( +12 / -0 )

Can anyone really believe it's so far fetched that Japan Inc. decided that he crossed the line and this was the opportunity remove him?

Well, there are 2 conspiracy theories here: One, that Ghosn conspired with Nissan's accounting departments and internal auditors to fudge financial papers he can't read and the other one that it's a Nissan conspiracy to get rid of him and take control of the company. Depends which is more believable to you.

3 ( +4 / -1 )

Maybe, but if he did have the company buy or pay rent on all these properties and didn't at least look into the tax consequences then he has no one to blame but himself

-3 ( +2 / -5 )

So let me get this straight:

TEPCO execs embezzle billions in donations, nothing happens.

KYB Corp falsified data on earthquake shock absorbers, potentially putting millions of lives at risk, nothing happens.

KOBE Steel falsified data for decades, nothing happens.

HITACHI, SUBARU, NISSAN, KUBOTA CONSTRUCTION, SUZUKI, and a whole lot more, all falsified data and financial figures, nothing happens.

But a foreign Chairman of a Japanese company, who likely doesn't do any of the paperwork on his salary, gets arrested for falsified data on his salary after an internal investigation?

Absolute bull poop!

16 ( +17 / -1 )

Yubaru

Here's to all the folks that were making comments about it "not being about him being gaijin". It's all about him, he ain't Japanese, and there are evidently quite a few people out there with knives in their hands to assist in stabbing him in the back.

They dont care about the company, they care about their own damn pride!

Exactly!

Belrick-

TEPCO execs embezzle billions in donations, nothing happens.

> KYB Corp falsified data on earthquake shock absorbers, potentially putting millions of lives at risk, nothing happens.

> KOBE Steel falsified data for decades, nothing happens.

> HITACHI, SUBARU, NISSAN, KUBOTA CONSTRUCTION, SUZUKI, and a whole lot more, all falsified data and financial figures, nothing happens.

> But a foreign Chairman of a Japanese company, who likely doesn't do any of the paperwork on his salary, gets arrested for falsified data on his salary after an internal investigation?

> Absolute bull poop!

exactly!

Remember Michael Woodford who blew the whistle on Olympus fraud and how he was demonized here in Japan? It seems that he got out just as they were going to do him in as this guy.

It seems that the modus operandi in corporate japan is bring in a foreigner to scapegoat when the time is right.

southeast factory workers or western ceos. doesn't matter. that's the MO every time.

9 ( +9 / -0 )

I’ll bet Nissan share holders are pooping their pants at present. Ghosn brought Nissan back from the brink of bankruptcy after many years of failed management from the previous Japanese CEOs. Who are they going to replace him with? Another stone-headed Japanese yes-man bureaucrat like the ones who ran the company into the ground in the first place? If you have Nissan shares it may already be too late.

4 ( +4 / -0 )

This whole thing could well have repercussions for Japan MUCH bigger than Nissan....

5 ( +5 / -0 )

An article in Financial Times "Carlos Ghosn was planning Nissan-Renault merger before arrest" gives all relevant information on the motive of Nissan and Saikawa for this charade.

https://www.ft.com/content/2bd83b12-ecbe-11e8-89c8-d36339d835c0

3 ( +3 / -0 )

And like that, he’s ゴーン.

Not my gag.

4 ( +4 / -0 )

https://www.youtube.com/watch?v=OzHI_EfFRAY

Here's a very interesting discussion on the whole topic

0 ( +0 / -0 )

Here's to all the folks that were making comments about it "not being about him being gaijin".

If it was about him being a gaijin, why now? He's been there 18 years. Nissan people did not just wake up a few weeks ago and realise "Hey! He is not a Japanese."

Further, it is now known that the whistle blower was a top level foreign executive at Nissan who feuded with Ghosn and quit early this year. His name is circulating among foreign businessmen. It will probably come out in the press shortly.

As part of the research for an article I hope to write on this, I have looked at every English language article I could find and everything in Japanese major newspapers that is not behind a paywall.

No major foreign or Japanese news source is playing this as an anti-foreign thing. That includes the Financial Times and the Wall Street Journal, both of which are generally critical of Japanese management.

What is being said in the financial press by reporters both Japanese and non-Japanese is that the issue was Ghosn planning to merge the larger and more profitable Nissan with the smaller and much weaker Renault. There are other Japanese companies headed by foreign nationals including McDonalds Japan (Canadian), Seiyu (American), and Mitsubishi Fuso Trucks (German). They seem to get alone without problem. So did Ghosn until a matter of months ago.

There is nothing distinctly Japanese about the Japanese press noting that Ghosn is a foreign national. The British press regularly gives the nationality of top business officials. For example, you don't need to read much about the Bank of England before you will learn that Mark Carney is a Canadian. When TSB had a massive computer failure earlier this year, the British press always mentioned that the company had come under Spanish ownership.

0 ( +4 / -4 )

From the Japan Times:

Nissan's Ghosn suspected of using firm's overseas houses for free without reporting benefit as income

The chairman is believed to have used multiple residences purchased by the automaker in the Netherlands and three other countries...

Seriously? No other CEOs have ever done this, or played golf, or gone to dinner, or travelled overseas, or... this is looking more and more like a palace coup.

1 ( +2 / -1 )

Corporate scandals are nothing new in Japan, but rarely are disgraced executives accused of personal enrichment.

That's a fair summary, given the information that we know, even if only a stereotype.

The Japanese, home-made and exported, scandals only tend to put millions of lives in danger both domestically and abroad, and/or missapropriate the taxes of millions of Japanese nationals.

But do go on and tell me how Ghosn is such a bad man...

Pish!

1 ( +1 / -0 )

In a way though, I'm glad this story has come about. Now the world will see how biased (to put it nicely) modern Japan is against foreigners...

They are good at hiding it but this event brings a lot into the light. Thanks, Nissan execs!

0 ( +1 / -1 )

The chairman is believed to have used multiple residences purchased by the automaker in the Netherlands and three other countries...

Seriously? No other CEOs have ever done this, or played golf, or gone to dinner, or travelled overseas, or... this is looking more and more like a palace coup.

Of course others have done and are now doing things like this. And, as long as you declare what is required to be declared on your taxes and other filings, there is no problem.

And, it probably is a palace coup. As long as Ghosn appeared to be working to make Nissan a stronger and more profitable company, he was treated as a hero within Nissan and the Japanese media at large. He got fawning admiration of the Television Tokyo World Business Satellite program, for example.

But, quite understandably, Nissan executives and employees did not want to be busting their buns for the greater glory of Renault especially since Renault has 40-plus percent voting stock in Nissan but Nissan has only 15% non-voting stock in Renault. The alliance was working. As the computer programmer mantra goes, "If it's not broken, don't fix it." Ghosn apparently tried to fix something that was not broken and a foreign national, not a Japanese, blew the whistle.

-2 ( +1 / -3 )

I read through most of the article and comments here. I am usually one of the first to smell a rat (in this case, the gaijin angle) but I didn't suspect that until reading those opinions. Very interesting. I will be following this keenly.

1 ( +1 / -0 )

The concept of whistle blowing goes against the grain of do as you’re told and loyalty to your leader in Japan. I’d bet it was the foreigner who reported.

-2 ( +0 / -2 )

In France there is whisper and allegations regarding Ghosn's conduct as well over the years....

-2 ( +0 / -2 )

If it was about him being a gaijin, why now? He's been there 18 years. Nissan people did not just wake up a few weeks ago and realise "Hey! He is not a Japanese."

There are several factors, with the Nissan-Renault merger the top reason for "why now", I think. But, if things go wrong, i.e. not to wishes and expectations of the Japanese side then it certainly plays a role. As the Woodward/Olympus scandal clearly illustrated. There is no precedence I know of of a Japanese executive (except Horie-Livedoor) who was arrested on the spot for fraud or embezzlement.

Ghosn was intense, totally focussed and prioritised performance above anything (I met him personally). Definitely not the shoganai type. He created enemies along the way and certainly also envy. He got away with it, doing things his way, as long as things went well. There is an interesting paragraph in an article in FT which is telling and explains the vicious trashing of Ghosn's legacy at Nissan by Saikawa. Ghosn certainly didn't mince words when somebody messed up.

(FT) 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, according to several people. Nissan’s reputation at home was also hurt as Mr Saikawa wrestled with scandals involving improper vehicle inspections and falsified fuel economy data.

1 ( +1 / -0 )

> In a way though, I'm glad this story has come about. Now the world will see how biased (to put it nicely) modern Japan is against foreigners...

They are good at hiding it but this event brings a lot into the light. Thanks, Nissan execs!

Agree 100%

0 ( +0 / -0 )

@bullfighter

Ghosn apparently tried to fix something that was not broken and a foreign national, not a Japanese, blew the whistle.

This from an unconfirmed source: The idea to merge Renault with Nissan's wasn't Ghosn's, but the French government's. Ghosn agreed to it as part of a deal to stay on with Renault.

According to reports, Nissan wasn't against the merger with Renault as a car company, but dead set against the French government having a say in the decision making of Nissan.

2 ( +2 / -0 )

This from an unconfirmed source: The idea to merge Renault with Nissan's wasn't Ghosn's, but the French government's. Ghosn agreed to it as part of a deal to stay on with Renault.

According to reports, Nissan wasn't against the merger with Renault as a car company, but dead set against the French government having a say in the decision making of Nissan.

This may indeed be the case. Thanks for calling my attention to this.

I have seen conflicting reports about Ghosn-Macron relations. Unfortunately, my reading ability in French is not sufficient to use French language reports. I'll look for someone to help me in this area.

With the 40-plus percent of Nissan stock held by Renault and the 15% French government ownership of Renault combined with the fact that the 15% of Renault that Nissan owns is non-voting stock, any merger would mean French domination of Nissan.

I have also read that because of French trade union and government opposition to factory closings, any "efficiency gains" for a Renault-Nissan merger would probably come at the expense of Japanese jobs.

Those now working at Nissan are largely survivors of Ghosn's past cost cutting that resulted in tens of thousands of Japanese jobs lost and a number of cities that lost their main employer. A lack of enthusiasm for a merger is perfectly understandable.

I rather doubt that French workers would be willing to take a hit to help Nissan. It is similarly unlikely that Nissan workers would be willing to take further hits to help Renault.

-1 ( +1 / -2 )

@ Bullfighter

You may want to read this, which shows that Ghosn is only a pawn sacrifice, queen sacrifice actually, considering his stature, in a much larger game with many subplots:

https://www.bloomberg.com/news/articles/2018-11-20/ghosn-scandal-puts-macron-in-spotlight-as-champion-of-business

Excerpt: There was also tension between the French government and Ghosn since Macron spearheaded the purchase of a stake [of Nissan] three years ago when he was economy minister to secure extra voting rights. It was a move that took Ghosn by surprise and he opposed it.

France wielded its power, though that ultimately created problems, according to Jefferies analyst Philippe Houchois. The French government’s representatives on the Renault board agreed to renew Ghosn’s mandate in February in exchange for a pay cut in 2018 and a pledge for Ghosn to deepen the partnership with Nissan. “With only a 15 percent stake in Renault, the French state may also have overplayed its influence,” Houchois said.

1 ( +1 / -0 )

http://www.autonews.com/article/20181120/COPY01/311209935/ghosn-scandal-prison-sentence

He is not JAPANESE, not part of the system. He made good and helped Nissan recover but now the company wants the GAIJIN out, seriously, the guy has a complex financial infrastructure who's gonna help him do his taxes? The company of course, because he can't read the language, shoot I know JAPANESE who can't read or understand all the Tax stuff they need to do, he was set up and it will cost him all that he supposedly under reported in fines, once the money has been extracted from him, he will be flown out of JAPAN with a do not return stamp. Not 1 Japanese individual will go down for this, all involved will be given extra bonuses and a new car of choice. LOL

3 ( +4 / -1 )

He is not JAPANESE, not part of the system. He made good and helped Nissan recover but now the company wants the GAIJIN out

That may well be the case but neither the article you cited from Automotive News nor do any of the others on their web site make that claim.

As others have pointed out with supporting documentation, the French government also wanted him out albeit for different reasons.

There have been palace coup in Japanese companies where the bun fight was entirely between Japanese nationals. Just because Ghosn was a foreign national does not mean that was the prime factor.

If Nissan was going to force him out after he had rebuilt the company, that could have been done much earlier. Ghosn came in 1999. By 2001 Nissan was profitable after Ghosn dumped more than 20,000 employees and chopped many subcontractors. In 2012 the group made more money than Toyota.

If dumping him once he had rebuilt Nissan had been the goal, that could have been done five or even ten years ago.

https://www.japantimes.co.jp/news/2018/11/20/business/corporate-business/carlos-ghosn-arrest-key-events-nissan-since-1999-restructuring/

I would also note that there are reports of gaijin bailing out of Nissan not because of problems they had with the Japanese but because of the problems they had with Ghosn.

1 ( +3 / -2 )

Anybody who has prepared a tax documents or financial papers in Japan knows that the accusations against Ghosn are nonsense. Such kind of documents are prepared by company accounting departments and auditors. Add to that the complexity of his income from 3 companies, residences in different countries and 3 passports. As Ghosn doesn't read Japanese, he wouldn't even know where to put the numbers. This is political, a coup, to finally get rid of the foreigner who rebuild the company and made it successful.

This may be a coup and there may be a degree of hypocrisy in his treatment, but this doesn't mean that he didn't under-declare his income. The fact that Japanese staff may have done his tax returns is not in itself clear evidence of innocence.

3 ( +3 / -0 )

To suggest he's being singled out just because he's a foreigner seems too simplistic. It ignores the reality of being in the top job for over a decade. Like anyone in his position Carlos must have made his fair share of enemies. He fired and hired people, he promoted and demoted, he funded projects and defunded others. Countless executives and employees at Nissan would have had grievances against him and few (if any) would need to resort to petty racism as justification.

2 ( +2 / -0 )

If you can read Japanese, read this securities filing of Nissan by President Saikawa dated November 12, 2018.

https://disclosure.edinet-fsa.go.jp/E01EW/BLMainController.jsp?uji.verb=W00Z1010initialize&uji.bean=ek.bean.EKW00Z1010Bean&TID=W00Z1010&PID=W1E63011&SESSIONKEY=1542778493343&lgKbn=2&pkbn=0&skbn=1&dskb=&askb=&dflg=0&iflg=0&preId=1&mul=%E6%97%A5%E7%94%A3%E8%87%AA%E5%8B%95%E8%BB%8A&fls=on&oth=on&cal=1&era=H&yer=&mon=&pfs=4&row=100&idx=0&str=&kbn=1&flg=&syoruiKanriNo=S100EIDS

当社取締役社長西川廣人及び最高財務責任者軽部博は、当社の第120期第2四半期(自 平成30年7月1日 至 平成30年9月30日)の四半期報告書の記載内容が金融商品取引法令に基づき適正に記載されていることを確認した。

確認に当たり、特記すべき事項はない。

"The Company's President Saikawa Hiroto and its CFO Karube Hiroshi have confirmed that the Company's second quarter financial statements for the 120th fiscal year, i.e. from July 1, 2018 to September 30, 2018, are duly reported in accordance with the laws and regulations of Financial Products Trading.

There is nothing special to mention in confirming the financial statements."

The President Saikawa said that the internal investigation was going on for months. How could he make the above J-Sox oath just a week before Ghosn's arrest? Saikawa mislead the investors.

1 ( +1 / -0 )

Japanese government officials had talks with French government counterpart about the issue and they wanted to keep ties with Renault. When I look around cars running in Japan, Toyota overwhelms Nissan and others. Nissan cannot survive without global strategy - selling cars overseas.

0 ( +0 / -0 )

It has nothing to do with Ghosn being a foreigner. It's all about the merger that Ghosn, Renault and the French Government were conspired to hatch between Nissan and Renault. Basically it'would have been a take over with Renault gaining heavily in market and technology.

Renault is only a big name in Europe with virtually no foothold in North America, SEA or China.

Nissan also owns various patents that are vital for the future in the automotive business like EV and gearless transmission.

France would have gained heavily with this merger with the big manufacturing facility in GB by Nissan shoving a knife into PM May if this merger had succeeded.

1 ( +2 / -1 )

To suggest he's being singled out just because he's a foreigner seems too simplistic. It ignores the reality of being in the top job for over a decade.

I agree. People here seem to have the race card set up on a hairpin trigger to be able to produce it from their sleeves at the mention of anything negative happening to a foreigner in Japan.

2 ( +3 / -1 )

Did an employee of 20,000 get laid off for the Ghosn's wealth? Too absurd!

0 ( +0 / -0 )

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