Carlos Ghosn: The Comeback of the Century

Opinion Analysis by by Tarek Eid, Contributor

October 27th, 2020

Carlos Ghosn is accused -in short- by Nissan of underreporting his salary, receiving unapproved funds from a Nissan dealer in Oman, as well as using company money for personal matters. He denies every single allegation.

Now why would Nissan, which Ghosn literally saved from bankruptcy two decades earlier and is the mastermind behind the alliance (10.6 million cars sold in 2017 alone) want to make the man fall? 

The real problem Nissan faced is that they felt they were losing power in the Renault-Nissan-Mitsubishi Alliance. Nissan owned 15% of Renault, while the French carmaker owned 43% of Nissan.

Over the years, Nissan has grown faster than its French partner, and Carlos Ghosn had plans to reinforce the links between Nissan and Renault. This would be very close to a full merger, and Renault would have been the primary winner of such a decision by gaining more power and a stronger majority in the partnership. This is why, seen from this perspective, Nissan had no interest in supporting Ghosn’s decision to strengthen the partnership between Renault and Nissan.

Nissan has always been very happy with Mr. Ghosn’s work since their numbers were doing amazingly great up until the 2008 crisis (12.5% margin growth in 2005), although the Japanese giant recovered quickly from the crisis, many problems came in the way of regaining the prosperity it once had, including a quality control scandal in Japan. Moreover, towards October 2018, Nissan’s operating profit was down by 25% compared to a year earlier. At this point, Nissan executives felt Ghosn’s compensation/results ratio no longer was in their favor. 

It is true Carlos Ghosn was extremely well paid for his work at Nissan. Out of nearly $17 million of total compensation in 2017 alone, more than $10 million was from his Nissan salary. Adding that to the bad shape of Nissan over the last 3 years of his term, he clearly was starting to get on the company’s nerves.

So, the answer as to why Nissan wanted Ghosn gone is clear: he was too costly - he no longer served the best interests of Nissan.

One would then argue why wouldn’t Nissan just fire the man with or without cause and claw back his future earnings? Why go through all this public judiciary and political battle and accuse him of these very serious crimes? More importantly, why was he treated like a criminal, a recidivist felon or a murderer? These treatments were not reserved to officials who were involved in other corporate scandals such as Takata Corp. or Olympus.

In order to make such allegations against their own chairman, Nissan needed to have a rock-solid case, which remains to be proven. Carlos Ghosn certainly did everything possible, under the circumstances, to shake the very basis of the harsh judiciary attack. 

How could Nissan, a global leader with expected rigorous compliance, governance and accountability miss the alleged wrong doings of Ghosn for years, where was their compensation committee when all this was presumably happening? 

If those allegations were true, Carlos Ghosn certainly did not deserve to be treated like a murderer, placed in solitary confinement, under severe conditions, with no access to his meds and no visitors allowed. This bad treatment, however, played in Ghosn’s favor, since the Japanese government and justice ministry were widely criticized for imprisoning a man for crimes that would usually be punished with a fine and a termination with cause. 

Japan’s judiciary system has a 99% conviction rate, which made Ghosn realize he was hardly ever getting out of this mess without a plan. This paved the way for what could become the first chapter of an unexpected thriller (brace for the books and movies that may follow). All thanks to one man, who goes by the name of Michael Taylor; also known as “Captain America” for his infamous dramatic escape and recovery missions conducted all over the world. A friend of Ghosn contacted Mr. Taylor and asked if he could help his “friend” stuck in Japan. Taylor, skeptical at first, soon found out about the Japanese criminal justice system, described by the UN as “medieval” and agreed to help Ghosn flee Japan. Thanks to his history in the Special Forces, his work in Lebanon and as a private military contractor, Taylor knew what was expected of him and was the perfect man for the job. 

Every part of this operation seemed completely unrealistic: finding a jet company willing not to put Ghosn’s name on the manifest, finding the least risky route out of Japan and into Lebanon, etc. After thorough research, Taylor found a Turkish private jet company claiming it was “used to doing this” when asked about sneaking a VIP out of the country discretely.  

Taylor made sure that he had a solid daily agenda for December 2019. Carlos Ghosn met Taylor and his associate at the Grand Hyatt Hotel, where he regularly had lunch. He then took off with Taylor and they boarded a high-speed train from Tokyo to Osaka, where the plane was waiting. Then came the music instruments box. Ghosn hid inside, and Taylor said they were in a hurry, so they were rushed out through security. Once in the plane, Ghosn got out of the box and entered the cabin. They flew over China and Russia to avoid countries like South Korea with extradition treaties with Japan. Once in Istanbul, Ghosn boarded another plane waiting a few yards away, while Taylor and his partner flew commercial towards Beirut. By the time he got to Rafik Hariri International Airport, the news had broken in the Lebanese media: “Carlos Ghosn has fled Japan and is now in Beirut”.

The Japanese were outraged. Their most famous and precious prisoner was almost on the other side of the planet. They neither expected nor saw such a scenario happen. This was clearly a large blow for a country that takes appearances seriously.

In his first press conference in Beirut since his escape, Carlos Ghosn gathered north of 150 journalists from all over the world, to make his case. He articulately displayed his version of events and every document he was allowed to use for that end and laid down his major defense line as victim of what he clearly portrayed as a boardroom war and a straight up backstabbing Coup d’État by Nissan.

Carlos Ghosn, in his own words, stands ready to face justice but was not ready to face the injustice of the Japanese system any longer. It is extremely hard to predict what each side of this battle have in store in their offense and defense. The trial of his deputy Greg Kelly a few weeks ago confirmed the complexity of this crisis. “I would love for Carlos Ghosn to be here”, said the former Nissan Executive at the start of his trial. 

Ghosn may be guilty or innocent, a fair trial may or may not happen, the case may be tried or settled. However, what Ghosn deserved and did not get is the preservation of his dignity, which he had to take back with his own hands and with great risks to himself and his loved ones.