“If they drop the charges, it doesn’t mean that we’re even. They have to compensate me for the damage they’ve done”
Carlos Ghosn earned his reputation as a leader by rescuing Renault from the brink of bankruptcy and subsequently achieving the same feat at Nissan. He accomplished this through the establishment of a powerful alliance that eventually included Mitsubishi Motors. This alliance had the potential to expand further to include Fiat Chrysler. However, Ghosn’s fortunes took a sudden turn when he was arrested upon his arrival in Tokyo on November 19, 2018. He faced charges of allegedly underreporting his compensation to the Japanese government.
Following his arrest, the former automotive industry magnate endured over 100 days in a small, unheated jail cell. The UN Human Rights Council later criticized his detention, deeming it “arbitrary and unlawful.” Ghosn was eventually released on bail of $8.9 million but was placed under house arrest. In a stunning turn of events, he managed to escape Japan by concealing himself in an audio equipment box. Ghosn maintained that the charges against him were politically motivated and that he had no hope of receiving a fair trial.
Currently residing in Lebanon as a fugitive, he has filed a lawsuit worth $1.1 billion against Nissan and a group of twelve executives. It was during this time that I had the opportunity to sit down with him on Tuesday to discuss various topics, including his lawsuit, the status of the Renault-Nissan-Mitsubishi Alliance, electric vehicles, and Elon Musk.
Struggling As A Fugitive
The lawsuit, filed in Lebanon, seeks $588 million in compensation and $500 million in punitive damages from Nissan and a group of twelve individuals, as some of the alleged crimes took place in Lebanon. The timing of the lawsuit reflects the time it took Ghosn to gather evidence after losing access to his phone, laptop, email, and other records during his arrest.
“I believe I now have about 30% of the evidence I had before,” Ghosn says. “But the remaining 30% is so clear and incriminating that we decided to proceed with the lawsuit.”
Ghosn points out that he was initially arrested for “underreporting compensation that was neither determined nor received.” Despite becoming the highest-paid executive in Japan, his pay was significantly lower than that of industry competitors like GM CEO Mary Barra, a position he claims former auto czar Steve Rattner offered him in 2009. While the charges against Ghosn have yet to be tested in court, the regulations and negotiations surrounding compensation for the leader of a multinational alliance were intricate.
“Unusual Conflict” At Nissan
Ghosn describes the current state of the alliance as a mere facade, emphasizing the recent unusual conflict between the CEO and COO, which led to the abrupt removal of the COO from the company. During the shareholder meeting on Tuesday, Ghosn notes that there was a surprising absence of any inquiries regarding the reasons behind the COO’s departure or the lawsuit he filed against the company.
According to Ghosn, the significant aspect that caught his attention was the limited number of shareholders present, which amounted to 243. In contrast, during his 19-year tenure as CEO, the average attendance at the meetings was around 2,000 shareholders. He characterized the recent meeting as a carefully orchestrated spectacle with a lack of transparency regarding the actual situation.
Ghosn further remarks that the underlying cause of this entire ordeal stemmed from a loss of trust between the Japanese and French parties involved. He asserts that the inevitable separation between them is evident and cannot be ignored.
Regarding EVs and Elon Musk
Ghosn also contemplated the prospects within the automotive industry and shared his insights with entrepreneurs and industry colleagues. He specifically discussed the transition to electric vehicles, noting that back in 2009, both he and Elon Musk were pioneers with the Nissan Leaf and Tesla, respectively. Ghosn acknowledges his own oversight, stating, “He created his own company. I didn’t. This was my mistake.” He reflects on the potential outcome had he established a startup focused on electric cars or batteries, recognizing that it would have placed him in an entirely different position today.
For more of Ghosn’s perspectives on electric vehicles, executive compensation, and his determination to restore his reputation and regain freedom from arrest, please watch the video above.
Ghosn also emphasizes that if the charges against him are dropped, it does not signify an equal resolution. He firmly believes that they must compensate him for the harm they have caused.
Conclusion
Carlos Ghosn’s journey from rescuing Renault and Nissan to facing arrest and subsequent escape has been a tumultuous one. As a fugitive in Lebanon, he filed a billion-dollar lawsuit against Nissan. Despite setbacks, Ghosn remains passionate about the future of electric vehicles and reflects on missed opportunities. He insists that dropping the charges is insufficient; he seeks compensation for the damage inflicted upon him.
