Nissan would have difficulties, according to Ghosn, who did not specify why.
TOKYO — Before he skipped bail and departed Japan, Carlos Ghosn spoke to a lawyer for more than 10 hours, predicting that Nissan would go bankrupt in two to three years.
The assertion was made by Nobuo Gohara, a former prosecutor and outspoken opponent of the Japanese legal system, who also claims that the former chairman and CEO of Nissan and Renault made the prediction last year during a series of meetings concerning his detention and prosecution.
Gohara, who spoke with the now-fugitive CEO, told reporters at a news conference on Wednesday in Tokyo that Nissan will likely go bankrupt within two to three years. According to the attorney, Ghosn did not provide specific justifications for why Nissan would face issues.
The corporation has cut its profit and sales projections for the fiscal year ending March 31 and announced it will lay off 12,500 people worldwide as a result of weakening auto sales in China and Europe.
For a book he intended to publish before the commencement of Ghosn’s trial, which is no longer expected to happen, Gohara claimed he met with and interviewed the former executive five times over the course of two months, immediately before the executive disappeared.
The lawyer said that Ghosn had given him authorization to reveal specifics of their conversations.
Gohara frequently addresses concerns pertaining to the Japanese legal system in his blog and on television. Since his detention, Ghosn has also decried Japan’s “hostage justice” system and the nation’s recent use of plea bargaining.
Speaking earlier this month from Beirut, the 65-year-old Ghosn claimed that he left Japan because he no longer believed he would receive a swift and fair trial.
The former executive was accused of financial malfeasance on a number of counts, including underreporting his income and betraying trust. Japanese prosecutors charged him with shifting personal trading losses to Nissan and utilizing company assets for his and his family’s personal gains in the latter cases.
Ghosn believed he was the target of a plot to kill him because he was working on the merger of alliance partner Nissan and Nissan. The third member is Mitsubishi Motors.
Gohara stated in Tokyo that “Nissan and prosecutors collaborated to pursue a criminal case against Ghosn.”
Following his arrest on the same day as Ghosn, Greg Kelly, a former official in the Nissan CEO’s office, is now most likely to be charged with financial wrongdoing alone. Kelly has a fair chance of establishing his innocence, according to Gohara “since Kelly and Ghosn are dealing with the same problems. If Kelly is found not guilty, Ghosn will follow suit.”
Ghosn contemplated going to court in a nation where prosecutors almost never lose, having already spent a total of nearly 130 days behind bars in a Tokyo jail. Last year, he was released on bail with stringent restrictions, including being unable to contact his wife and only being permitted to use a computer at his attorney’s office.
Nissan is not currently investing heavily on all-electric cars, despite the fact that this is a significant focus for certain automakers and Wall Street. By 2023, the business intends to introduce eight all-electric vehicles. According to Gupta, Nissan sees EVs as a “consequence, not the purpose.”
Given that Nissan was the first major automaker to release an all-electric vehicle named the Leaf in 2010, his remarks may come as a surprise. However, sales of the car and its market did not perform as well as anticipated. Since the Leaf’s debut, the company has only sold about 500,000 of the vehicles.
Based on consumer demand, Nissan is adopting various electrification strategies in areas like Europe, China, and the U.S. Nissan’s plans call for both all-electric vehicles and new hybrid models with tiny internal combustion engines and batteries, dubbed “e-Power.”
By the completion of its recovery plan, Nissan anticipates selling 1 million EVs and e-Power vehicles. By the early 2030s, all new cars are anticipated to include an electric or hybrid variant.
According to Gupta, “I think we have to understand what the client is looking for,” adding that the U.S. is far behind China and Europe in the adoption of EVs, where the firm is primarily focusing its new electrified vehicles.
IHS Markit estimates that in 2020, sales of all-electric vehicles will account for less than 4% of the worldwide market.
Nissan is “cautiously hopeful” despite a 14% decline in operational profit.
The Japanese company’s announcement provides some hope for the auto sector, which has been severely hampered by supply chain disruptions that have complicated carmakers’ production schedules.
According to Nissan Chief Operating Officer Ashanti Gupta, initiatives have been taken to replace custom-made semiconductors with general-purpose chips over the medium term and to secure inventory levels with suppliers in the short term.
The CEO noted that all of Nissan’s Chinese suppliers have resumed operations at full strength.
We are using these challenges as a chance to further refine our business practices, Gupta said.
The business maintained its full-year operating profit target of 250 billion yen ($1.85 billion) for the year ending on March 31 and aimed to sell 4 million devices globally.
At the same time that COVID-19 lockdowns are ending, Gupta emphasized that the chip scarcity “is not gone.”
Nissan blamed a shortage of chips, pandemic precautions in China, and high commodity prices for the first quarter’s operating profit decline of 14% to 64.9 billion yen, while a weaker yen had brought some relief.
Due to limited inventory, the company produced 15% fewer vehicles—812,000—than it had anticipated for the months of April through June, and worldwide retail sales decreased by around 22% from the same time last year.
The primary cause of the operational profit’s decline and subsequent reduction by 50.7 billion yen was the rising cost of raw materials, especially aluminum and steel. Gupta claimed that a sales increase of 53.5 billion yen offset the effects of higher commodity prices.
Nissan “will go bankrupt in two to three years,” according to Ghosn
Former Nissan CEO and fugitive Carlos Ghosn has more to say. He seemed to be just getting warmed up.
According to a story from Bloomberg on Tuesday, Ghosn predicted that “Nissan will go bankrupt in two to three years” to his defense attorney, Nobuo Gohara, a former prosecutor.
Before escaping bail and fleeing Japan in a big box with holes punched into it, Ghosn allegedly said the foreboding warning during more than 10 hours of interviews in 2019.
Gohara claimed that he and the former executive met five times over the course of a two-month period just before Ghosn departed to Lebanon, but Ghosn refused to give any precise explanations.
Gohara said that Ghosn had given him the go-ahead to divulge specifics of their chats.
In a strange 2.5-hour press appearance earlier this month, Ghosn revealed he had left Japan because he didn’t think he would face a fair prosecution.
Ghosn stated during that press conference that he would be open to having his case heard outside of Japan. It’s crucial to me that I clear my name, so I must do that.
When Ghosn was detained in 2018, this weird saga started. The accusations included making false statements to investors regarding his pay and adding personal losses to the business’s accounts. Ghosn was fired from the Renault-Mitsubishi-Nissan alliance while he was detained in Japan for months following his arrest.
Nissan is currently revamping its product line. Recently, updated Titan pickup trucks and a new all-electric compact crossover SUV were introduced, while new Versa and Sentra small cars are in the works. In the upcoming years, a new Z vehicle might potentially appear.
While he works to clear his record, Ghosn has stated that he intends to remain in Lebanon, a country without an extradition treaty with Japan. The former executive may find it challenging to travel because Japan has sought Interpol for assistance in bringing Ghosn home.
Will Nissan ever return?
Despite the fact that two-seat sports cars aren’t particularly popular, the new Nissan Z is one of the most significant vehicles in the automaker’s recent history since even a car firm requires a soul.
Nissan has experienced some difficult times during the last four to five years. Carlos Ghosn, the former CEO of Nissan, was detained in 2018. An outdated product lineup that was mostly caused by Ghosn’s focus on fleet sales rather than consumer excitement had been hurting the company’s operations. Alfonso Albaisa, the company’s chief designer, expressed his unhappiness with the situation last year. Even Hiroto Saikawa, Nissan’s former CEO, was had to acknowledge in 2019 that the business had “reached rock bottom.”
However, Nissan has been making a comeback by introducing new automobiles like the Pathfinder and Rogue SUVs. The Z, with its emphasis on style and excitement, looks to serve as a sort of spiritual hub for that uprising. When the new Z was unveiled last year, Albaisa told me that designing this new vehicle, which has lines evocative of classic Nissan sports cars, was something that helped the team come together.
Recently, I had the opportunity to drive it on motorways and winding backroads for hundreds of miles. The new Z turned out to be an unexpectedly likeable long-term travel partner, offering genuine comfort during the tediously long stretches but thrill when the route called for it.
Is Nissan Motor Company experiencing money problems?
- Nissan is moving forward after the scandal-plagued departure of former CEO and now wanted international fugitive Carlos Ghosn by making significant progress on a global restructuring plan.
- The Japanese manufacturer is on track to accomplish the goals outlined in its “Nissan Next” turnaround plan one year earlier than the target date of March 2024.
- Following nearly a decade of leadership by Ghosn, Nissan Next is a combination of cost-cutting, product investment, and culture reform.
On a prototype of its new all-electric Ariya crossover, Nissan has lighted its logo. The vehicle’s grille reflects Nissan’s Z Proto sports car, while an updated Nissan Pathfinder SUV is seen in the distance.
As it moves past Carlos Ghosn’s scandal-plagued departure, Nissan Motor is making considerable strides in a global restructuring plan to downsize operations and return to profitability.
In a video interview from Nissan’s headquarters in Yokohama, Japan, Gupta, who is in charge of the transformation, said: “Despite the headwinds, we have pulled ahead the recovery by one year.” We are far ahead of schedule compared to what we predicted, which enabled us to weather the pandemic’s headwinds in 2020.
Following almost 20 years under Ghosn, who fled Japan to Lebanon in December 2019 while awaiting trial on allegations of financial wrongdoing, Nissan Next is a blend of cost-cutting, product investment, and culture transformation. Nissan CEO Makoto Uchida outlined the recovery plan as a road map to long-term profitability and “competition for the next ten years.”
The company’s operations are being significantly scaled back in order to place more of an emphasis on higher profits than on Ghosn’s goals of sales volume and growth. Nissan still has a ways to go in terms of profitability, but according to Gupta, there are some encouraging indicators.
Nissan’s 2020 fiscal year, which ends in March, saw a loss of 367.7 trillion Japanese yen ($3.4 billion) through the first three quarters. However, it exceeded its initial objective by 100 billion Japanese yen ($921 million) in the third quarter, producing an operating profit of 27.1 billion Japanese yen ($250 million). Additionally, compared to its earlier plan of 300 billion Japanese yen ($2.8 billion), it has reduced fixed costs by 330 billion Japanese yen ($3 billion).
According to Gupta, cutting fixed costs by closing operations, leaving markets like South Korea, and lowering plant shifts internationally allowed the corporation to arrive ahead of schedule. Other goals of the transformation plan include a 20% reduction in the world’s manufacturing capacity, a tripling of operating profit margin to 5%, and a marginal increase in worldwide market share from 5.8% to 6%.
Analysts are cautiously optimistic that Nissan can turn things around based on the early findings. According to FactSet, the price of Nissan shares listed on the Tokyo Stock Exchange has increased by nearly 51% in the past year.
Following the company’s third quarter earnings, Morgan Stanley analyst Kota Mineshima wrote in a letter to investors, “Our impression is generally one of progress.”