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Carlos Ghosn comes out all guns blazing in Lebanon

Murali Gopalan | Updated on January 13, 2020 Published on January 09, 2020

With the former Renault-Nissan boss likely to sing like a canary, the Japanese automaker has its work cut out

It was almost surreal to see Carlos Ghosn live on TV as he held forth in an exhaustive press conference in Lebanon on Wednesday.

Surreal because he had resurfaced after 14 months of being confined in Japan while awaiting trial for a series of allegations on financial impropriety. Just when it seemed that he was doomed to oblivion, the former Chairman of Renault-Nissan fled Japan to resurface in Lebanon.

It was in Beirut that he met the press. The mood was distinctly combative as he set forth to name those officials in Nissan who had played a role in his long captivity. As expected, Ghosn denied all the allegations against himself and reiterated that he was ready to face a fair trial, which he maintained was absolutely impossible to conceive of in Japan.

Ordeal in Japan

At one level, this is not entirely untrue given that the country’s ‘hostage justice’ system had come in for a fair deal of criticism from human rights organisations worldwide. Ghosn’s own ordeal is a case in point: he was whisked away to a detention centre in Tokyo, held in solitary confinement for over 100 days, and released on a hefty bail only to be rearrested soon after he proclaimed his innocence on a brief video.

He was out again on bail but was now denied permission to contact his wife, Carole. There was no indication when the trial would begin and it almost seemed as if Ghosn was destined to spend the rest of his life behind bars in Japan. Till the improbable escape happened followed by the high-voltage press conference, which saw him answer questions from a massive gathering of global journalists who had converged here.

The huge turnout was quite understandable. This was Carlos Ghosn, at one time the most powerful CEO of the global automobile industry who had scripted a dramatic turnaround for Nissan when it was down in the dumps two decades ago. From his point of view, he was done in by the same company that he had rescued thanks to, what he distinctly implied was, a conspiracy at the highest levels.

Ghosn’s press meet was the most widely anticipated event this week and he did not disappoint his audience. For those familiar with his flamboyant style, it was clear that the former Chairman of Renault-Nissan had lost none of his energy. This time, however, he was keen on settling scores and people were willing to listen: after all, this was the first time he was giving his side of the story after being gagged for so long.

It is also obvious that a press meet is hardly the place to decide whether someone is innocent or guilty. For now, Ghosn still stands charged of his alleged crimes and it is up to a court to decide whether he should be paraded back to jail or allowed to walk out a free man.

A fugitive

The fact that he has absconded from Japan also implies that he is, for all practical purposes, a fugitive who has sought asylum in his native Lebanon. This essentially means that it is going to be a long while before the wheels of justice begin getting into motion and a so-called fair trial begins.

Japan will, of course, be itching to get back its former prodigal son but that is not going to happen in a hurry. Till then, Ghosn will be quite free to constantly fire one salvo after another from Lebanon and this is precisely what Nissan will be dreading.

He is out to get even with his former employer and obviously knows far too much. The fact that he has been kept on a leash for so long is added reason for Ghosn to come out all guns blazing. This, in turn, will hardly help the cause of rebuilding the Renault-Nissan alliance, which is already reeling under immense strain.

Sceptics will be quite right in asking what kind of credibility a convict enjoys; more so when he has flown the coop to escape justice. The problem here is that the Japanese judicial system has not quite covered itself in glory during the Ghosn saga. The crude way he was presented in court with a rope tied around his waist did not help its cause either.

At the end of the day, this was the former chairman of a top automobile alliance and not some terrorist who had to be locked away indefinitely. If he was being accused of serious financial crimes, there was a better way to handle it. Putting him through solitary confinement and imposing severe restrictions on his daily routine was not the best way to go about it.

This is precisely why Ghosn will continue to get the eyeballs whilst in Lebanon, where he will ensure the continuation of a verbal fusillade. Till he is actually pronounced guilty for his crimes, he will be free to hold forth on his views on Nissan and the future of the alliance, and even have some more skeletons tumbling out of the closet.

All this will hardly help the cause of the Renault-Nissan partnership, which has been battered since the time Ghosn was arrested in late-2018. It is only now that a leadership structure is in place at Nissan to ensure that the rapport with its decades-long French ally is back on track. This is not going to be easy and will involve a tremendous effort from both sides to put their egos aside and move on.

Now, with Ghosn free to talk from Lebanon, there will always be the overhang of a CEO who, till not so long ago, was the real pivot of the Renault-Nissan (and now Mitsubishi) alliance. He is bound to be critical of attempts being made to fix things and will pull out uncomfortable reminders from the past to throw people off balance from time to time.

Wednesday’s press meet at Lebanon was the first salvo and, in all likelihood, will be talked about through the week at the global offices of Renault and Nissan. Ghosn was at the helm for nearly two decades and it is but natural for employees to chat in hushed tones about their former boss now literally back from the dead.

Clearly, he would have had his set of loyalists (and detractors) at both companies, which means that the present leadership structure will be more than aware of their daily moves being scrutinised. It does not matter that Ghosn is no longer the monarch of the alliance; the problem is that there will be constant comparisons to his working style and this will hardly help the cause of the present dispensation.

Free fall mode

The added problem is that Nissan is in a free fall mode and this makes it look even more vulnerable in this dramatic turn of events. Ghosn made it a point to drive home this message and this is where the Japanese automaker will have its work cut out. There is just too much on its plate now, and recent moves to axe over 12,000 jobs worldwide and perhaps do away with the Datsun brand worldwide will not help in the confidence-building drive either.

The bigger challenge is to ensure that the alliance with Renault stays strong in the coming years. According to a section of industry observers, this is not going to be easy even while the French government (which holds a stake in Renault) is pulling out all the stops to ensure things are on track. The levels of distrust have grown in recent times and now with Ghosn set to sing like a canary, the mood could only become darker.

It is not as if a divorce will happen overnight but this is as bad as an immobile partnership, where neither side will take the initiative in healing past wounds. This can becomes especially difficult during a time of new challenges in the global automobile arena, right from electrification to autonomous driving. All these will require smart thinking and hefty investments if the companies want to stay ahead of the curve.

The Ghosn saga could also cause more apprehension among expats on considering leadership positions in Japan. It is quite natural for them to worry about the ‘hostage justice’ system and the possibility of being locked away without being given a chance to prove their innocence. The best way forward is to ensure a fair trial for Ghosn quickly: till that happens, the mudslinging will continue from both sides and help nobody’s cause.

Published on January 09, 2020
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