Five years ago this month, on Monday, December 30, 2019, Carlos Ghosn shocked the world by making a sensational escape from Japan to his home country of Lebanon. Reports that he was in Lebanon made it to the French press around 9:30 pm GMT and then, shortly after, around the world.
The once celebrated chief executive of the Renault, Nissan and Mitsubishi Motors alliance is still fighting to clear his name, while Nissan’s business situation has deteriorated again, as media reports indicate that the automaker could be heading toward bankruptcy.
Ghosn, in an exclusive interview with Asia Times, said he doesn’t think bankruptcy is likely. “But they need money and they need investment,” he said. “Management has no idea how to turn things around.
He doesn’t believe that an alliance with Honda Motor Co., a theme of recent press coverage, will materialize. “What I believe is that there could be a takeover. The Japanese government might decide that it can’t let Nissan collapse. But as you know, a takeover is not an alliance. It’s just a takeover, which also means that the company taking control is going to do it its own way and get rid of what it doesn’t need. That may happen,” he said.
“Also, remember that Honda is fiercely independent and has never been able to establish an alliance. They’ve bragged over the years that they’re the little guy going alone against Toyota.”
An added concern is that Honda hasn’t been a leader in its automotive business. Even in the United States, which is its main market, Honda’s market share is less than 10%. In Europe, it is less than 1%. In Japan – where it is now the fourth-leading brand, up one place from fifth the previous year – it still accounts for only 11% of the market, virtually unchanged.
Meanwhile, its profit margin in the first half of the current fiscal year, April to September, is only 3.6%, well down on the list of global automakers.
Things fell apart at Nissan post-Ghosn
Nissan’s operating profit fell 90% during the same period to 32.9 billion yen. Its operating profit margin is now 0.5%. More significantly, vehicle sales this year are expected to drop to 3.4 million, down from 5.7 million in fiscal 2017 and 5.5 million units in fiscal 2018, the final two years Ghosn was in charge.
“Frankly, a lot of people have asked me how is it that after I left, everything collapsed,” he said. “But not only did I leave. A lot of other people left with me.” Ghosn previously estimated around a dozen. “And these were people who had grown up in the organization.”
He singled out José Muñoz, who in November became the CEO of Hyundai Motor Co. “Muñoz was one of the most promising talents at Nissan,” he said. “Several weeks after my arrest, he left.”
Muñoz, who spent five years in Tennessee as head of Nissan’s North American operation, left Nissan on January 11, 2019, two months after Ghosn’s arrest. He had been warned by the US ambassador, a Tennessee native, not to return to Japan after receiving a summons to do so.
Muñoz joined Hyundai three months later in April 2019 as chief global operating officer. He had been on the short list to become Nissan’s next president in 2018.
If 30 years younger, would sign on for a Nissan fix
“Personally, I don’t think that this is mission impossible,” Ghosn said of Nissan’s current plight, “but it will be difficult for them. I can tell you if I were 30 years younger and somebody independently offered me the opportunity to turn Nissan around, I would do it. But you have to find the right people with the right vision of the industry. Obviously, the industry in 2024 is not the same as the industry in 1999. The challenges are different.”
Ghosn wouldn’t offer details of how he might go about fixing Nissan. “I never give a plan before making a diagnosis of the situation. For the last six years, a lot of damage has been inflicted on the company. I’d need to reassess the situation about where the damage is and who are the people responsible.
“When I arrived in Japan in March 1999, I didn’t have a plan in mind,” he said. “It took me three months to assess the situation and establish a plan. But I didn’t do it alone. I established it with the collaboration of many people inside Nissan.
“I’m sure that a lot of people inside Nissan are distressed and feel helpless,” he added. “Why did we do all of this? What happened to our company? Why is there is a curse on this company?
“No one really good is going to join a team of politicians. They won’t. They said that the alliance was working. It wasn’t. They said that Nissan was going to grow. It didn’t They spent the past six years saying that all the problems at Nissan were due to my management, even though there was never a problem with me at the helm. All the problems started after I left.
“They can’t continue to blame someone else for something that happened six years ago. This is their own doing.”
As for Renault, the company that took a stake in Nissan and sent Ghosn to Japan to run it, “they are back where they were before 1999, which is a small French company centered in Europe. They got out from China. They got out from Russia. They got out from everywhere, and they are today with the volume and market presence not very far from what they were before the alliance,” he said.
When I asked him whether Nissan can be a player again in electric cars, Ghosn replied: “Come on, they’re looking for survival now. They can’t look to modernize or innovate. They’re just looking for money. It’s very basic stuff they’re doing, and they don’t know how to do it. These guys are panicking.”
Ghosn further noted that Nissan reportedly has come under attack from two aggressive hedge funds, Effissimo Capital Management and Oasis Management Group. “These could be another source of trouble,” he said, adding that he personally thinks “Nissan is going to hit the wall and the outcome this time is going to be much worse than in 1999.”
He warned that its “biggest problem moving forward is trust. You can’t have an alliance without trust. If the Japanese hadn’t trusted me in 1999, I couldn’t have turned them around. We would have never been able to stay in Japan for 19 years if there wasn’t trust. Trust is the basis of everything. When trusts is breached, the collapse is near.
“They’re now trying to make a kind of theater for the public that they’re doing something new or that it’s a new version of the alliance. It’s all bullshit,” he said.
Life in Beirut
Ghosn is comfortable in Beirut, though his life is not the way it once was when he traveled to and fro among five luxurious homes and apartments on three continents, mostly conducting alliance business, in his personal-use corporate jet.
He’s not the only fugitive in the household. The alleged crime committed by his wife Carole, a dual national American and Lebanese, was to be evasive in answering questions about her husband asked by the judge handling his case. She was interviewed on April 11, 2019, a week after prosecutors raided their Tokyo apartment and took her phone and her Lebanese passport. She would be charged 10 months later, eight days after Ghosn’s escape and the day before his Beirut press conference, with making false statements in that April meeting.
While not discussing the specifics of Carole’s case, Ghosn reported, as he’s done in the past, that one of his interrogators at the Tokyo Detention House warned him that if he didn’t confess “We are going to be looking everywhere. We’re going to involve your wife, we’re going to involve your kids, we’re going to involve your friends, and we’re going to find things.
“This was all taped,” Ghosn said, “and the tapes are in the hands of the prosecutor’s office.”
For this report, we asked Ghosn if, after Israel’s two-month bombing campaign, he could still walk safely from his home to dine out in a restaurant.
“No problem,” he said. “Absolutely none. We weren’t affected so much by the war, even though the country suffered a lot. Fortunately, we live in an area which avoided any war action. So we’ve been fine. We’re hopeful that the ceasefire holds even though it’s not perfect. But so far it’s holding.”
He added that there are no restrictions on his children visiting him. “They can come whenever they want,” he said. In fact, Ghosn’s children will be in Lebanon for a family Christmas holiday.
When asked about his home in the exclusive Ashrafieh area of Beirut and whether he has been evicted as media reports have indicated, he said, “I’m in the same home, so no. This is going to be a very long legal battle. I know there have been a lot of incendiary comments in the press that I have been thrown out of my house. They’re not true. I am still in the same house. It’s going to take many, many years before this issue is resolved” in court.
Ghosn has challenged Nissan’s claims of ownership of the residence through a Beirut-based subsidiary, Phoinos Investments SAL, on the basis that the automaker owes him money. When he escaped from Japan, Nissan froze his assets, including money in the automaker’s retirement fund. The property reportedly is valued at $19 million.
Meanwhile, Ghosn, now 70, continues his fight to have his reputation cleared. He has not given up even though most legal avenues have been blocked — in Japan, France and the United States.
Concerning the French case, he said: “French prosecutors issued an arrest warrant in April 2022 and asked me to go to France, ignoring the fact that there is already a red notice on me from the Japanese, which forbids me to leave Lebanon,” said Ghosn.
“I didn’t go. As a result, we don’t know the details of what the prosecutors are planning. Which means: It may take another year for us to learn the specifics. It’s not a very complicated case, but we still don’t know what the charges will be.”
I asked whether the charges involve his business dealings with Suhail Bahwan, the founder and former and former chairman of Suhail Bahwan Automobiles LLC in Oman.
“Without getting into details,” he replied, “the prosecutors are trying to establish that money from Renault or Nissan” — media reports indicate 15 million euros — “came to me. That’s the case that the French prosecutors are making. If there is no money from Renault or Nissan coming to me, there is no case. And there is no case,” he said.
Asked about a British Virgin Islands case, involving a super-yacht, in which he was ordered to pay millions of dollars in damages, Ghosn said: “We’re appealing. Nissan is trying to get me to spend money.” Litigating “is very expensive and obviously they’re using Nissan’s money. I’m using my own. We didn’t try to defend ourselves because I can’t leave Lebanon. I think we have a very strong case on appeal.”
Concerning his criminal complaint and case against Nissan in Lebanon, in which he is seeking $1 billion in damages and he has identified 11 Nissan executives, he replied: “Justice is working. It’s slow because of the situation of the country, but I’m still fighting on the Lebanon case. Obviously, that means I have many things at work in Lebanon against Nissan.”
Asked to comment further on his being stuck in Lebanon because his name is on the Interpol red notice list, he concluded: “I am not going to talk too much about it. But I don’t consider the battle over.”
