By Joel Saget
On 28th December 2019, Carlos Ghosn, known as “Le Cost Killer,” fled from Japan in the most surprising way possible. He was on bail under conditions in Tokyo, Japan. He left his hotel, met two people in a nearby hotel, changed clothes and hid in an audio instrument box to pass through the x-ray machine at Kansai International Airport because the box was too big to pass through the machine. He then landed in Istanbul and took a private jet to Beirut.
The question is: who is Carlos Ghosn?
Carlos Ghosn started his career as an engineer in Michelin, a tyre making company. Due to his hard work, he was promoted as the plant manager at Le Puy-en-Velay. Later the Head of Research and Development at Michelin’s industrial tyre division. He was so keen at his work that he became the COO of Michelin South American Operations. He was called by Francois Michelin to help the company’s way out during the Brazilian Hyperinflation.
Then started the golden period of his career. He was appointed as the CEO of freshly privatised Renault (a France automobile company). Ghosn advised the Chairman of Renault, Louis Schweitzer to buy a 36.8% stake in the Japanese automobile giant Nissan at 5 Billion Dollars. This move was criticised by Bob Lutz (Vice Chairman of General Motors) because Nissan has 20 Billion dollars of interest-bearing debt and it produced 46 car models out of which only 3 were profitable. But this is where Carlos Ghosn got his name “Le Cost Killer”
He came out with the ‘Nissan revival plan’ which cut down 21000 jobs, closure of 5 plants in Japan and sale of the Nissan Aerospace Unit. His promise was to get the company to profit or resign, and the whole world was surprised when Nissan reported 2.7 billion dollars profit after tax from a 6.46-billion-dollar loss in the previous year.
He was the Worlds first person to lead 2 companies which were listed on the Global Fortune 500. He was awarded the Blue-Ribbon Medal by Emperor Akihito in 2004, being the first foreign leader to be awarded so.
Renault also bought 34% stake in Mitsubishi (Japanese Automobile Giant) which then made the Renault-Nissan-Mitsubishi alliance the fourth largest automobile maker in the world selling more than 10 million vehicles every year.
So, you would think: why did such a visionary leader escape in such horrible conditions?
Carlos had done that work which many great industrialists thought was impossible. Turning tables around was an easy task for him now. He was responsible for removing many Japanese cultures such as Keiretsu. He had become an enemy for many who were earlier given an age-based promotion in Japanese companies. The successor he had chosen for Nissan turned against him and things started getting bad. He was charged by Nissan for underreporting his income from 2009-12. There were allegations that he used USD 18 Million of Nissan’s funds to buy residences in Amsterdam, Paris, Tokyo, Rio de Janeiro and Beirut. Carlos Ghosn started experiencing sleepless nights. Nissan filed a 90 Million Dollars suit against him and Carlos Ghosn was released on bail after 108 days.
Renault continued to support him following the “not guilty until proven” rule but later provided him with a retirement.
So don’t you think that removing Carlos Ghosn from the company is a loss of such a valuable asset? A leader who worked so hard and surprised the entire industry by turning tables around for loss-making companies in just 1 year, sat in jail for 108 days even without being proven guilty.
The question also comes is that why wasn't anything done when Toshiba overstated their profits by 1.2 billion dollars? Why were 5 automobile companies (Suzuki, Subaru, Mitsubishi, Nissan and Mazda) left without any compensation when they falsified emission data and Volkswagen had to pay 21 billion dollars for the same thing? Why did Carlos Ghosn spend around 4 months in jail whereas Olympus executive spent only 8 weeks for 1 billion dollars Accounting Fraud?
Is this the gift that you get for working so hard in a company? Or these are the consequences of playing with a country's working culture for getting profits?
Carlos Ghosn said, "The Japanese people are usually very prudent, even when they are convinced that the change is necessary."
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