TOKYO — It was a trip to Japan that Carlos Ghosn had made countless times before in his role as the jet-setting alpha boss of the Renault-Nissan-Mitsubishi alliance.
But this time, as he unsuspectingly made his way through Tokyo’s Haneda airport toward immigration control, his business trip would veer into anything but the ordinary.
According to people familiar with details of that fateful night a year ago on Nov. 19, the immigration officer did a double take at Ghosn’s passport, then ominously asked him to step into a side room. Waiting there was someone from the Tokyo prosecutor’s office.
Before the evening was over, a dumbfounded Ghosn was unceremoniously whisked to jail. People close to him say he wasn’t allowed so much as a phone call — not to a lawyer, not to his secretary, not even to his daughter, who was waiting at his Tokyo residence when investigators soon raided the property.
Thus began a stunning year of scandal and upheaval that toppled Ghosn as one of the world’s most esteemed business leaders, nearly derailed the Franco-Japanese auto empire he built over two decades and triggered a maelstrom of tumult at Nissan.
When Ghosn landed in Japan a year ago, he had a very different vision for what Nissan would be as 2019 drew to a close. According to those familiar with his thinking at the time, Ghosn was planning to move Renault and Nissan closer together under a new holding company structure that would be completed by June 2020. He was also pondering a management shuffle that would likely have removed his long-serving protege, Hiroto Saikawa, as Nissan’s CEO and tapped a younger team of top brass.
Today, out on bail and awaiting a criminal trial, Ghosn privately bemoans the reduced state of business at Nissan, with its plunging profits and its fragile partnership with Renault, people close to him say. Ghosn, those people say, also has little confidence in the new leadership at the automaker alliance, doubting that the executives have the mettle to wrangle such a massive, complicated business.
That doubt applies to Jean-Dominique Senard, Ghosn’s successor as chairman of Renault, as well as to Makoto Uchida, the man tapped as Nissan’s next CEO, starting Dec. 1. One source says Ghosn dismisses the new consensus-driven leadership style that the alliance has adopted as “Santa Claus management.”
Over the past year, Nissan’s performance, which was already deteriorating before Ghosn’s arrest, has taken a steep plunge. Last week, the company said operating profit tumbled 70 percent in the July-September quarter on slumping sales, forcing it to slash its full-year earnings outlook.
Nissan announced last week that it now expects operating profit margin to slump to 1.4 percent in the current fiscal year ending March 31. That figure stood at 6.3 percent on March 31, 2017, the day before Ghosn handed the CEO reins to Saikawa but stayed on as chairman.
Ghosn has made no secret of his dismay at Nissan’s decline.
In a video statement released in April after Ghosn was jailed a second time, he decried Nissan’s business as “absolutely mediocre,” citing a rash of profit warnings at that time.
“I’m worried because, obviously, the performance of Nissan is declining,” he said. “But also, I’m worried because I don’t think there is any vision for the alliance being built.”
Ghosn’s arrest a year ago occurred as the alliance stood at a strategic crossroads. Those privy to Ghosn’s thoughts at the time say he was unhappy with Nissan’s declining performance under Saikawa and quietly planning a management shake-up. Jose Munoz, the Spanish executive who had driven North American operations to new volumes and then served as the company’s global chief performance officer, was a leading candidate to replace Saikawa, one person said.
“Saikawa and some people around him would be gone, and they would reshuffle the management team,” the person said of Ghosn’s plans.
Such a narrative dovetails with Ghosn’s own comments this year. In his video message, the last time Ghosn spoke publicly, he described his downfall as a corporate coup engineered by certain Nissan executives worried about losing their grip on power.
“This is about conspiracy. This is about backstabbing,” Ghosn said at the time. “There was first a fear that the next step of the alliance, in terms of convergence and in terms of moving toward a merger, would, in a certain way, threaten some people or eventually threaten the autonomy of Nissan.”
Today, both Saikawa and Munoz have left the company. Saikawa was pressed to resign in September under the cloud of his own compensation scandal. Munoz left in January as part of an exodus of Nissan executives. He now serves as the global COO of Hyundai Motor Co.
Ghosn’s 2018 plans also aimed to satisfy Renault’s biggest shareholder — the French government. Ghosn’s envisioned Renault-Nissan holding company was a means to deliver what France wanted in the way of an “irreversible” merger of the companies.
But sources say Ghosn also believed a holding company would protect the autonomy of each carmaker. He intended to set it up in such a way that Renault and Nissan would keep their own headquarters and maintain their unique corporate cultures, even as they traded under a newly minted single stock.
The merger also would have removed the French government from the ownership, satisfying desires on the Nissan side to stop French bureaucrats from meddling in the Japanese automaker, one source said of Ghosn’s plans.
“It would be a very simple way to ensure the autonomy, without changing the habits, but at the same time creating irreversibility,” one person familiar with Ghosn’s thinking said.
Ghosn had discussed the idea with Saikawa and the Renault board, the person said, but Saikawa had some reservations, preferring that the companies be listed under separate shares.
A year later, instead of pursuing that vision, Ghosn lives a court-regulated life in Japan, awaiting trial on four indictments of financial misconduct during his time at Nissan. His bail conditions prohibit him from leaving the country, restrict his Internet and phone access, and forbid him from contacting his wife.
The first two indictments charge him with failing to disclose more than $80 million in deferred compensation. The other two are breach-of-trust charges that accuse Ghosn of diverting company money for personal gain. Ghosn, who has denied the entire slate, faces up to 15 years in prison and a fine of up to $1.4 million if he is convicted on all four counts.
Ghosn’s attorneys and others around him say he is concentrating on the legal battle ahead. And it could be a long fight. The trial isn’t expected to begin until spring, at the earliest.
Ghosn doesn’t dwell on the grim prospect of being locked up, they say. But at the same time, he doesn’t entertain ambitions of any sort of post-trial comeback if cleared, they say.
“I understand that for the media, there is some significance to this one-year anniversary of his arrest,” Junichiro Hironaka, one of Ghosn’s lawyers, said at a news conference last week. “However, you must understand that Mr. Ghosn is firmly focused on preparing for the trial.
“To the extent he is allowed to, he visits my office almost every day.”