Nissan Chief Carlos Ghosn Arrested for “Significant Acts of Misconduct”

Posted by

A handful of automotive executives have attained “world leader” status, and Carlos Ghosn was one of those people. Now Ghosn, a 40-year veteran of the automotive industry, whose alliance with Mitsubishi Motors, Nissan and Renault manufactures one of ever nine cars built in the world, has been arrested for what prosecutors in Japan are calling “significant acts of misconduct.”

A press release from Nissan Global lays out the facts:

Based on a whistleblower report, Nissan Motor Co., Ltd. (Nissan) has been conducting an internal investigation over the past several months regarding misconduct involving the company’s Representative Director and Chairman Carlos Ghosn and Representative Director Greg Kelly.

The investigation showed that over many years both Ghosn and Kelly have been reporting compensation amounts in the Tokyo Stock Exchange securities report that were less than the actual amount, in order to reduce the disclosed amount of Carlos Ghosn’s compensation.

Also, in regards to Ghosn, numerous other significant acts of misconduct have been uncovered, such as personal use of company assets, and Kelly’s deep involvement has also been confirmed.

RELATED: Nissan’s Product Lineup

According to the release, Nissan has been providing information to the Japanese Public Prosecutor’s Office, and is in full cooperation with the investigation.

As the misconduct uncovered through our internal investigation constitutes clear violations of the duty of care as directors, Nissan’s Chief Executive Officer Hiroto Saikawa will propose to the Nissan Board of Directors to promptly remove Ghosn from his positions as Chairman and Representative Director. Saikawa will also propose the removal of Greg Kelly from his position as Representative Director.

Ghosn’s grandfather was born in Lebanon and emigrated to Brazil at the age of 13, eventually becoming an entrepreneur in the agricultural and aviation industries. Carlos Ghosn was born in 1954 in Brazil, and moved to Lebanon at the age of six with his mother and sister. Following his secondary education in Beirut, he studied as an engineer in France.

After his graduation in 1978, Ghosn went to work for tire giant Michelin, where he rose through the ranks of plant manager to become head of research and development. He was appointed chief operating officer of the company’s South American division at the age of 30, where he turned the operation around into profitability in two years. In 1989, he became COO of Michelin’s North American division, and was promoted to CEO the following year.

French automaker Renault recruited Ghosn as an executive in charge of purchasing, advanced research, engineering and development, powertrain operations, and manufacturing in 1996. He was also placed in charge of Renault’s South American division. Through radical restructuring, the company returned to profitability in 1997.

In March 1999, Renault purchased a 36.8% stake in Nissan, and while maintaining his roles at Renault, Ghosn took on the COO role at Nissan. He became president of Nissan in 2000, and CEO in 2001.

By BsBsBs – Own work, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=15808346

Ghosn’s role at Nissan was earth-shattering. First, he was just the fourth non-Japanese executive to ever lead a Japanese automaker. Second, his Nissan Revival Plan in 2000 was again a radical restructuring, calling for the elimination of 14,000 jobs, shuttering five Japanese factories and restructuring Nissan’s supply network. He pledged to resign if Nissan didn’t achieve a profit margin in excess of 4.5% of sales by the end of fiscal year 2002, and a 50% reduction in the current level of debt by the end of fiscal year 2002. Just 12 months into his three-year plan, Nissan was again profitable, and within three years was one of the world’s most profitable auto makers. All of the Nissan Revival Plan’s goals were met by March 31, 2002.

It cemented Ghosn’s reputation as a world-leading auto industry executive and made him an international superstar with almost head-of-state status. Over the years, Ghosn has been recruited by Ford Motor Company, but he would only take the position if he was named CEO and Chairman, a position that Bill Ford, Jr. refused to relinquish.

2002: appointed a Chevalier of the Legion of Honour (Knight of the Legion of Honour) by the French government.

2002: Fortune awards Ghosn Asia Businessman of the Year.

2003: named Man of the Year by Fortune magazine’s Asian edition.

2003: Fortune lists him as one of the 10 most powerful business leaders outside the U.S.

2004: inducted into the Automotive Hall of Fame.

2004: inducted o the Japan Automotive Hall of Fame.

2006: made an Honorary Knight Commander of the Order of the British Empire.

2010: listed as one of the “Most Respected CEOs by CEO Quarterly.

2011: Named Asia Business Leader of the Year by CNBC.

2012: award the Japan Society Award.

2012: the first person in the auto industry, and the fourth overall, to win a Lifetime Achievement Award from the Strategic Management Society, a non-profit group that promotes ethical and strategic business stewardship.

2012: awarded the Grand Cross of the Order of Isabella the Catholic, an honorific designation to civilians in recognition of services that benefit Spain.

2013: appointed an International Fellow of the Royal Academy of Engineering.

Share:
Craig Fitzgerald

Craig Fitzgerald

Writer, editor, lousy guitar player, dad. Content Marketing and Publication Manager at BestRide.com.

Leave a Reply

*