The world’s biggest automotive partnership took a major blow today with news that Carlos Ghosn, leader of the Renault-Nissan-Mitsubishi alliance, has been arrested by authorities in Tokyo over alleged financial violations.
Nissan said in a statement that an internal investigation (paywall) showed that the 64-year-old chief executive had under-reported his salary and had committed financial violations, such as “personal use of company assets,” along with the company’s director Greg Kelly. Nissan also said that it plans to fire Ghosn as company chairman over “serious misconduct” and that it’s cooperating with Japan’s Public Prosecutor Office. Kelly has also been arrested.
Ghosn, a Brazilian-born French national, became a legend in the car industry for turning around ailing car brands Renault and Nissan during his near-20 years at the helm of those companies. He earned the moniker “le cost killer” for ruthless restructuring (paywall) and slashing tens of thousands of jobs. He was well-respected in Japan too, where there was a manga comic (paywall) about him, called The True Life of Carlos Ghosn.
Now Ghosn’s position as CEO of Renault and leader of the Renault-Nissan-Mitsubishi alliance may also be on shaky ground. Renault shares in Paris plunged more than 12% when the news broke, while Nissan shares traded in Germany fell by nearly 11%. France owns a 15% stake in Renault, and French president Emmanuel Macron said this afternoon that the government “will remain extremely vigilant regarding the stability of the alliance, the group and … its employees.”
His ouster comes at a terrible time for Nissan, which admitted to falsifying emissions data in July.
Ghosn joins an ignominious list of automotive bosses who’ve become ensnared in scandals in recent years, including former Volkswagen CEO Martin Winterkorn, who resigned when the Dieselgate scandal broke in 2015. A fanatical micro-manager who instilled fear in this employees, Winterkorn now faces arrest in the US. Former Audi CEO Rupert Stadler was arrested in Germany in June of this year as part of the investigation into his involvement in the VW group’s emissions cheating; he was released on bail in October.