Carlos Ghosn is a Lebanese businessman who was born in Brazil (/goUn/; French: [kaRlos gon]; Arabic: krlws GSn; Lebanese Arabic pronunciation: [‘ka:rlos ‘gos?n], born 9 March 1954). Ghosn is also a citizen of France. He is an internationally sought-after fugitive as of January 2020. Ghosn served as the CEO of Michelin North America as well as the chairman and CEO of Renault, AvtoVAZ, Nissan, and Mitsubishi Motors. In addition, Ghosn served as the chairman and CEO of the Renault-Nissan-Mitsubishi Alliance, an alliance formed by these three automakers through a complicated cross-shareholding contract. Since 2010, the partnership has held a 10% share of the global market, and as of 2017, it was thought to be the biggest vehicle group globally.
Ghosn was appointed as Louis Schweitzer’s deputy at Renault in 1996 and given the responsibility of rescuing the firm from the brink of bankruptcy. Ghosn developed a cost-cutting strategy for the years 1998 to 2000 that included a personnel reduction, changes to the production process, standardization of car parts, and a push for the introduction of new models. Major organizational changes were also made by the company, including the introduction of a lean production system with delegated responsibilities (the “Renault Production Way”), a reform of work practices, and the centralization of research and development at its Technocentre to lower the costs of vehicle conception while accelerating such conception. Ghosn earned the moniker “Le Cost Killer.” He gained the moniker “Mr. Fix It” in the early 2000s for planning one of the auto industry’s most aggressive downsizing initiatives and leading Nissan out of its financial crisis in 1999.
After Nissan’s financial turnaround, he was named Asia Businessman of the Year by Fortune in 2002. He was named one of the top ten business leaders outside of the United States by Fortune in 2003, and the Asian version of Fortune named him Man of the Year. He was ranked third most recognized business leader in 2004, and fourth most respected in 2003, according to surveys conducted by PricewaterhouseCoopers and the Financial Times. His life has been depicted in Japanese comic books, and he swiftly rose to fame in Japan and the corporate world.
On April 1, 2017, Ghosn resigned as CEO of Nissan, but he remained the company’s chairman. On November 19, 2018, he was detained at Tokyo International Airport on suspicion of underreporting his pay and flagrantly misusing business resources. Nissan’s board unanimously decided to remove Ghosn as chairman of the company on November 22, 2018, with immediate effect. On November 26, 2018, the executive board of Mitsubishi Motors made a similar decision. At first, Renault and the French government stood by him and assumed he was innocent until proven guilty. Ghosn was forced to step down as chairman and CEO of Renault on January 24, 2019, when they ultimately decided that the situation was intolerable. Ghosn was re-arrested in Tokyo on April 4, 2019, while he was still free on bail that had been granted in early March, on fresh charges of stealing money from Nissan. Nissan shareholders decided to remove Ghosn from the board of directors on April 8th. On April 25, he was once more given a bail release. Renault discovered 11 million euros in dubious expenditures by him in June, which prompted a French probe and raids.
On December 30, 2019, Ghosn violated the terms of his release by taking a private jet from Japan to Lebanon through Turkey, with the assistance of an American private security contractor who was concealed inside a musical instrument box. Interpol sent a red alert to Lebanon on January 2, 2020, requesting the arrest of Ghosn. Since his escape, he has been the topic of numerous interviews with the media, books, a European TV series, and a BBC documentary called Storyville.
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Carlos Ghosn: Who is he?
In November 2018, Carlos Ghosn was taken into custody in front of a large crowd just as his private jet touched down at Tokyo’s Haneda airport. This arrest shocked the business community.
The man who resurrected the fortunes of France’s Renault and Japan’s Nissan, creating a partnership with Mitsubishi to create the world’s second-largest automaker, saw a precipitous fall from glory. He served as CEO of Renault while also serving as chairman of all three businesses.
Ghosn revitalized Nissan, achieving rockstar status in Japan, where foreign corporate heads are uncommon. His biography was even serialized in a manga comic book due to his hero popularity. Lebanese stamps and Japanese bento lunch boxes both include his portrait.
The 65-year-old Ghosn, whose name rhymes with “phone,” was born in Brazil to Lebanese immigrants. He is also a French and a Lebanese citizen. He was raised in Beirut and then attended the esteemed Ecole Polytechnique in Paris before working for Michelin. He worked for the French tire company for the first 18 years of his career. In 1996, Renault hired Ghosn, who earned the moniker “Le Cost Killer” for his harsh restructuring policies.
After Renault acquired a 43.4% share in Nissan in 1999, he reiterated same statement there, solidifying his position as one of the world’s most successful businessmen. Jurgen Schrempp, a former chairman of DaimlerChrysler, gave Ghosn the nickname “icebreaker” for his capacity to break through rigid Japanese business practices and bring Nissan back to profitability in less than a year.
Renault and Nissan were joined in an alliance by Mitsubishi, another iconic Japanese corporation, under Ghosn’s leadership that allowed for cost and component sharing. Unusual shareholding arrangements linked the businesses without actually merging them, although Ghosn asserted that his eventual dismissal was motivated by concerns that he was pressing for a full merger with Nissan as a subordinate partner.
The alliance appointed Ghosn as the leader of the second-largest automaker in the world, giving him political clout in countries like France, Japan, and anywhere the company had factories.
That included the UK, where Nissan’s factory in Sunderland became a focal point of the Brexit discussion when Ghosn forewarned that future investment remained reliant on the trade agreement with the EU. Theresa May was the prime minister when Ghosn met with her to discuss the plant, and he ultimately obtained PS61 million in covert state help.
If Ghosn ever goes back to Japan, he will be charged with four counts of financial wrongdoing, including understating his compensation and squandering corporate resources. He was detained for more than 120 days prior to his trial before being freed on bond once more in late April. International outrage was directed at his treatment.
Ghosn will have to carefully weigh the legal implications of leaving Lebanon given the unresolved charges. Only the US and South Korea have extradition accords with Japan, though.
Ghosn will be able to live somewhat freely in the nation of his parents and his wife, Carole, in the meanwhile. Ghosn, who has received criticism repeatedly for pay packages seen as excessive, will almost certainly forgo $9 million (PS6.8 million) in bail paid in Japan, but he will still be able to rely on an estimated net worth of $120 million, which includes a pricey Beirut mansion and a stake in a Lebanese vineyard a few miles from the Mediterranean Sea.
Former Nissan CEO Carlos Ghosn has an international arrest warrant issued by France.
An international arrest order has been issued by French authorities for disgraced auto magnate Carlos Ghosn, who made a daring escape from Japan in 2019 to Lebanon.
The investigation into money laundering and the misappropriation of corporate assets was opened in 2019, according to the prosecutor’s office in the Paris suburb of Nanterre, which announced on Friday that it had issued the warrant for the former heads of Nissan and Renault and four other individuals. Millions of dollars in suspected questionable payments between the Renault-Nissan alliance and Suhail Bahwan Automobiles (SBA), an Oman-based distributor of automobiles, are the subject of an investigation by prosecutors.
Having been released on bail after being accused of financial impropriety in Japan, the former leader of the Nissan-Renault partnership escaped to Lebanon in 2019. He contests his guilt. Ghosn claimed that he learnt of the fresh warrant on Friday from the media and pointed out that he is already prohibited from leaving Lebanon.
He told French television station BFM, “I’m prepared to defend myself.” He asserted again and time again that there was “no embezzling” and that he had not received any money from the Oman distributor. Later on Friday, Ghosn told the Lebanese TV station Al-Jadeed that the timing of the arrest warrant raised concerns and that he had long since planned to retire in Lebanon. “The timing is unexpected. Two days before the (French) presidential election, such a warrant is issued?” said Ghosn. “This raises some red flags for us. There is horrible smell.”
When asked if he might start a conflict between France and Lebanon, Ghosn responded: “In my opinion, no. I believe that both nations must come to an understanding.” He suggested that French and Japanese judicial officials work with Lebanese authorities and send the cases to Beirut so that Lebanon’s judicial authorities can determine whether any crime occurred. If not, a trial will be held in France without him, he stated.
This warrant was the next stage in the current investigation, one of two different cases involving Ghosn in France, according to the Nanterre prosecutors’ office. Ghosn expressed his confidence, vigor, and resolve to fight for the recovery of his reputation in an interview with The Associated Press from the previous year.
The French warrant was described as “surprising” in a statement his PR team provided to the AP on Friday, and it was implied that it was ineffectual since Ghosn “is subject to a judicial ban on leaving Lebanese territory.” Citizens of Lebanon are not extradited. Ghosn is a citizen of Brazil, France, and Lebanon.
How Carlos Ghosn Became A Corporate Superstar Before Getting Away
In Japan, Carlos Ghosn made his debut as a daring young auto executive. He rose to the position of CEO of two automakers and became a corporate legend. Now he is on the run. Carlos Ghosn speaks to us about his ascent and decline.
HOST AILSA CHANG
BYLINE: CURT NICKISCH Everything began in 2018, when Carlos Ghosn was detained by Japanese authorities and accused of concealing his compensation and squandering corporate funds. Ghosn was accustomed to traveling the world in a private plane and lodging in luxurious mansions while working as the CEO of Nissan. He was currently imprisoned in a cell.
NICKISCH: Yann Rousseau of the French business publication Les Echos paid Ghosn a visit while he was incarcerated in Tokyo.
ROUSSEAU: He was that way because of his grayer and messier hair. He was still quite classy, though.
Ghosn was likely the best-known CEO in Japan, according to NICKISCH. He was so effective in turning around Nissan’s financial situation that he accepted a second position as CEO of French automaker Renault. Both employers paid him highly because they didn’t want to lose him. Rousseau, though, claims that Ghosn’s hefty salary was unpopular in France.
It’s a scandal for the French, says Roussel. The workers, the unions, and the politicians in France are all grumbling. It’s excessive.
NICKISCH: Ghosn’s salary in Japan may have contributed to his downfall. There, executives typically don’t receive huge compensation packages. Former ambassador Sadaaki Numata is shown here.
SADAAKI NUMATA: It has been reported that in Japanese culture, a protruding nail is immediately driven in. Someone does stand out if they have too much money.
NICKISCH: A new law requiring the disclosure of executive pay is introduced in Japan in 2010. Carlos Ghosn earned $10 million at Nissan that year, it turns out. The top automaker in Japan, Toyota, didn’t even pay its CEO $1 million. Ghosn has thus been defending his compensation to press and Nissan shareholders for years. The arrest of Carlos Ghosn follows in 2018. Japanese prosecutors portray Ghosn as a rapacious executive who planned to pay himself millions of dollars secretly. However, the case is never tried. Ghosn runs away. He sneaks onto a private jet in a music equipment box and takes off for Lebanon, where the Japanese government is powerless to stop him. When we spoke with him, he bragged about it.
It was successful because it was incredibly daring, says Carlos Ghosn. That you would dare to do something like this would not have been suspected.
NICKISCH: According to Ghosn, who maintains his innocence, he left Japan because he believed he wouldn’t receive a fair trial. He acknowledges that as CEO, he violated Japanese customs but not laws, and that he deserved big remuneration since he produced outcomes.
GHOSN: There is a demand for CEOs. What the market is willing to pay for CEOs also constitutes what is fair. Therefore, I agree far more with American compensatory theory than I do with Japanese or French philosophy.
CHANG: The host of the “HBR IdeaCast” podcast, Curt Nickisch, collaborated with Planet Money to produce this piece.