Late in the evening on 29 December 2019, two men posing as musicians wheeled a pair of large audio equipment cases to the gate reserved for private jet passengers at Osaka’s international airport. The cases were too big for the regular X-ray machines, and the airport staff, no doubt exhausted from a long day processing holiday travellers, waved the men and their cargo through. Out on the tarmac, a ground crew worker noticed that one of the cases seemed heavier than it had when he unloaded it that morning. ‘Maybe there is a beautiful young lady in the box,’ an airport official joked. There was, of course, a person in the box. It was Carlos Ghosn, the former chairman of the world’s largest car manufacturer, Renault-Nissan-Mitsubishi. But nobody knew he’d gone missing yet, and the box, with Ghosn inside, went smoothly onto the plane.
Two decades earlier, Ghosn (pronounced like ‘phone’), then a senior executive at Renault, had been sent to Japan to resuscitate Nissan, in which Renault had just bought a $5.4 billion stake. Nissan was close to bankruptcy at the time, and Renault’s gamble was considered risky. Bob Lutz, the head of Chrysler, compared it to parking ‘$5 billion in a container ship and sinking it in the middle of the ocean’. Ghosn himself believed – or claimed to believe (he was capable of strategic self-deprecation) – that he had only a fifty-fifty chance of success. In October 1999, he presented his rescue plan in a rousing speech in Tokyo. As Hans Greimel and William Sposato show in Collision Course, Ghosn’s story was a chronicle of triumph and downfall foretold, and the foretelling could be heard right there in the grand ballroom of the Royal Park Hotel.
‘No sacred cows, no taboos, no constraints,’ Ghosn proclaimed as he advanced from his merciless analysis of the company’s failings to his drastic proposals for turning it round. That Yoshikazu Hanawa, the head of Nissan and Ghosn’s nominal boss, was sitting next to him as he spoke was a good indication of the taboos this newcomer was willing to break. ‘If there is no greater torment in Japanese culture than loss of face,’ a journalist present commented, ‘then Hanawa must have been in excruciating pain.’ As for sacred cows, Ghosn was prepared to sacrifice the whole herd, including the expectation of jobs for life and predictable, age-based promotion. Around 21,000 jobs were to go, five factories shuttered, career advancement determined by merit alone. The traditional Japanese system of suppliers and manufacturers bound together through mutual shareholdings was to be dismantled entirely, with Nissan divesting from all but four of its almost 1400 affiliated companies, and henceforth awarding contracts through competitive bidding rather than clubby relationships.
Carlos Ghosn wasn’t the only auto industry executive who could have schooled Nissan in these measures, but he may have been the only one capable of implementing them. Being a foreigner helped, or rather being the right kind of foreigner: neither tall nor blue-eyed (this was apparently appreciated at Nissan), and too indeterminate in origin (born in Brazil, raised in Lebanon, educated in France) to embody any obviously opposed national interest. True, he was from Renault, in which the French government still held a significant stake, but the company appeared to be pursuing a genuine alliance rather than a merger, and this too positioned Ghosn for a favourable reception at Nissan.
But it was his personal qualities that seem to have carried the day. Despite having earned the nickname ‘Le Cost Cutter’ (soon to become ‘Le Cost Killer’), there was nothing of the austerity ideologue or dour corporate axeman about him. This wasn’t Ian MacGregor flying in to Thatcherise British Steel or tell the miners they weren’t working hard enough. He was a natural diplomat, consulting across the board before making his moves, always referring to Nissan as an equal partner, fluent in four languages, with a gift for the expansive gesture – along with the cuts, his rescue plan included reviving two beloved Nissan brands, the Z-car and the ‘Godzilla’ GT-R, a finely judged sop to company pride. He dazzled listeners with his command of facts, rattling them out at 160 words per minute (so Greimel and Sposato tell us), compared with the 130 of most public speakers. His endearing resemblance to Mr Bean was also part of the magic, though this was a dynamic, hyper-functional Mr Bean: cartoon-eyebrowed but steely-eyed. Steve Rattner, Obama’s ‘car czar’, described Ghosn as ‘intense – almost like a coiled spring – earnest, and precise, all wrapped in a compact package of determination and drive’. A high performance light vehicle, in other words.
Success came quickly. By 2002, three years after his arrival, Nissan was profitable again. Jobs had been lost in Japan, but the expansion abroad spurred foreign sales, especially in the US, and Nissan’s share growth soon started outpacing Renault’s own. The decisiveness of the recovery made Ghosn a celebrity, rare among Japan’s studiously bland CEOs. People wanted his autograph, his haircut, his glasses. His deeds were immortalised in a manga comic, The True Story of Carlos Ghosn. In 2004 he celebrated them himself in a memoir, Shift. In hindsight one might want to add a ‘y’ to the end of that title, but at the time no one would have dreamed of anything so blasphemous. In 2005 he was made CEO of Renault in recognition of his accomplishment.
With this dual crown, Ghosn ascended to the highest heights of global darlinghood. He began holding court at Davos, the first car man to do so. He acquired homes in Paris, Beirut, Tokyo and Rio, as well as a yacht with seven bathrooms. He was wooed by both Ford and GM (he rebuffed them). Nissan had a team of stylists at his disposal, but the boardroom look wasn’t cutting it now that he was keeping company with heads of state, and he began cultivating fashion designers, consorting with the likes of Yohji Yamamoto, sharpening his suits, dyeing his hair, getting his eyes lasered. If you’ve watched D.A. Pennebaker and Chris Hegedus’s 1981 documentary about John DeLorean, another car man with a magic touch, you may recognise this as the moment where the hitherto unprepossessing DeLorean sheds his corporate image, making himself over as an American playboy with model girlfriends and a sexily enhanced new chin.
Calamity, when it came, was the result of two largely unrelated sources of tension unexpectedly converging. The first, no secret to anyone, was the inherent strain of the alliance. Renault’s assurance that it was only interested in obtaining cheaper supplies through economies of scale, along with a mutually beneficial pooling of engineering knowhow, seems to have been sincere – at least at the outset. Each side kept control over its own design and marketing, and retained its own executive team. Not a takeover, in other words. And yet significant power imbalances were built into the arrangement. Renault’s 43.4 per cent stake in Nissan came with voting rights and was almost three times Nissan’s stake in Renault. As the rescuee, Nissan hadn’t been in a position to object to these terms. But as its sales and profits began to eclipse Renault’s own, turning it into a cash cow for its rescuer, the deal began to rankle.
In 2014, Emmanuel Macron, then France’s economy minister, pulled a devious stunt under the country’s protectionist Florange Law which doubled the voting rights attached to the French state’s 15 per cent stake in Renault. If this had stood, it would have given the French government ultimate control over Nissan, making it hostage to French political exigencies such as unemployment or the agitations of the gilets jaunes. In the end, Macron’s power grab was limited by the Nissan board, with Ghosn’s support, but the manoeuvre shook the Japanese, and played into suspicions of yet more perfidious designs on the part of the French.
The other tension arose from a more personal and closely guarded matter: the question of Ghosn’s compensation. In 2010, new disclosure rules in Japan required companies to divulge salaries for anyone earning more than 100 million yen ($1.1 million at the time). Ghosn, who had declared in Shift that transparency was one of the key ‘pillars’ of credibility in business, was suddenly in the embarrassing position of having it revealed that he was earning not only far more than anyone else at Nissan but more than six times as much as the heads of Honda and Toyota. In a culture that had resisted the vast pay gaps common in the US and elsewhere, this caused a certain amount of resentment. At first Ghosn brazened it out, arguing that his pay was modest by international standards. This was true – the industry average for automotive CEOs in 2011 was close to $18 million, whereas Ghosn was pulling in a mere $12.5 million – but it was only relevant if you regarded Nissan as an international company, which most of its Japanese employees did not. The grumbling spread to shareholders, and Ghosn, sensitive to the optics if not the ethics, asked his subordinates to find ways to pay him what he felt he was owed (which turned out to be a lot more than $12.5 million) under the radar. They obliged: auditing at Nissan was lax, and Ghosn wasn’t someone you said no to. Besides, they had no wish to lose their champion to one of his American suitors. Even when Mitsubishi was brought into the alliance in 2016, adding another $2 million to Ghosn’s annual income, he continued goosing it with stock options and other deferred compensation schemes.
As long as things were going well, Ghosn was able to keep a lid on both of these simmering conflicts. And things went very well for a remarkably long time. Despite cultural differences between the companies (Nissan’s factory floors were spotless, for instance, while Renault just painted over the dirt when it got too much), despite petty rivalries between the two engineering teams, Ghosn delivered on his promise to find cost-cutting synergies, creating mega-hit brands such as the Nissan Rogue (a priceless name in retrospect), adding $60 billion in value to Nissan and, in 2017, turning the alliance into the world’s top seller of light vehicles. Even misfires such as the Nissan Leaf, Ghosn’s pioneering foray into mass-market electric vehicles, were forward-thinking. Whatever else he might have been, he was successful, and in 2018 his contract was renewed. This time it came with a new mandate: ‘to make the alliance irreversible’.
It was the word ‘irreversible’ that seems to have triggered the debacle that followed. To Nissan’s Japanese executives, already rattled by the Florange affair, it sounded like code for the ruinous dishonour they had been dreading from the start: full merger. A rebellious spirit sprang up among Ghosn’s formerly docile underlings. ‘At the end of the day, we have to protect Nissan,’ his one-time protégé Hiroto Saikawa declared. A more explicitly jingoistic tone soon emerged: ‘I seriously question whether Mr Ghosn has had any respect for Japanese people and Japanese society at all.’ Pragmatic loyalty to the outsider gave way to covert treachery, encouraged by Japan’s Ministry of Economy, Trade and Industry, and sanctioned by a belated awakening to Ghosn’s financial chicanery. The hired gun had done his job and was starting to become a nuisance. It was time to get rid of him.
On 19 November 2018, Ghosn flew to Tokyo on the company Gulfstream, expecting to attend a gala for the alliance and present plans for a new holding company that would bind the three manufacturers into a single entity. Instead, he was arrested at the airport and locked in a cell at the Tokyo Detention House in Kosuge. An American aide, Greg Kelly, lured to Tokyo the same evening on a separate flight, was also arrested. The next day Saikawa gave a press conference at the Nissan HQ, where he accused his boss of massive and ongoing financial fraud, with Kelly as his accomplice.
It turned out that Saikawa, along with a handful of mostly Japanese colleagues, all actively opposed to the new holding company, had been working with prosecutors for several months. Many of them had signed off on the documents they were now bringing to light, or had otherwise implicated themselves in the allegedly illicit schemes. Two had made plea bargain deals. Saikawa himself had falsified a document to boost his own pay by $400,000. According to one source, he had also just learned that Ghosn was about to ditch him as his presumptive successor. None of this, least of all the fact that the only people being prosecuted were two foreigners, passed unnoticed by an enthralled world press.
The peculiarities of the Japanese legal system were a particular source of fascination: no jury; sustained interrogation without lawyers present; judges cravenly deferential to prosecutors; prosecutors allowed to appeal the (very rare) acquittals; and, of course, the use of witnesses who had entered into plea bargains, and were therefore vulnerable to pressure. Most striking of all was the rule allowing suspects to be detained without charge for 23 days at a time and then rearrested under a new pretext. In Ghosn’s case, this process was drawn out for 130 days.
On 10 December, near the end of his first three-week detention period, Ghosn was indicted on a charge of hiding almost $45 million in deferred compensation. He was eligible for bail, but was promptly rearrested for a similar offence and the clock was reset to day one. Eleven days later he was rearrested on a third charge involving a $14.7 million transfer by way of a Saudi Nissan distributor. He was formally indicted three weeks later and two months of discussions over his bail conditions followed. On 5 March 2019 he was released after posting the record sum of almost $9 million in cash. One month later he was arrested for a fourth time, charged with accepting a kickback of $5 million from an Omani distributor. Eighteen days after that (and another $5.5 million in bail) he was finally let out. His bail conditions were stringent: surveillance cameras on his house, no internet access except at his lawyer’s office, no face-to-face contact with his wife. He wasn’t, however, fitted with an electronic anklet.
Greimel and Sposato suggest that the prosecutors had been counting on Ghosn folding under pressure, apologising, and slinking off with a suspended sentence. That would certainly have been the most convenient outcome for Nissan. But they had misjudged their man – his amour propre if not his actual propriety. By digging in his heels, Ghosn was exposing himself to serious prison time, but also threatening to inflict serious public embarrassment on his accusers. Even without resorting to stereotype (‘did you notice what happened in Pearl Harbor?’), it was easy for him to make the case that he was the victim of a dastardly conspiracy in which trumped-up charges based on the selective application of murky laws were being used to advance a xenophobic political agenda. His colleagues at Renault needed no persuading, at least at first. Some believed that the Japanese had been gathering kompromat on Ghosn from the beginning, to use when the time was right. Macron, not naturally inclined to help the man who had bested him, complained to Shinzo Abe that Ghosn’s detention was ‘too long and too hard’. Even the UN Human Rights Council, lobbied by Ghosn’s wife, Carole, issued a report condemning Ghosn’s treatment as ‘an extrajudicial abuse of process’.
But the tide turned. Alongside the prosecutors’ charges, Nissan itself began leaking information and innuendo calculated to tarnish Ghosn’s heroic image. The story went around that he had used a Nissan subsidiary to pay $22 million for his homes in Brazil and Lebanon, secretly awarded himself an $8.9 million signing bonus and salary after setting up another subsidiary, paid his sister $750,000 for non-existent consultancy work, and improperly billed Nissan for millions more in lavish personal expenses. The campaign worked – by attrition if not adjudicated proof. Renault eventually launched its own inquiry into its CEO and found $12.3 million in questionable spending. More damning, the US Securities and Exchange Commission, which couldn’t be said to have a dog in the race, accused Ghosn of concealing $140 million in future payouts.
‘I’m being attacked from all sides,’ Ghosn complained (or perhaps just drily observed – his attitude to his own ordeal is hard to pin down). In any case, things got worse. On Christmas Day 2019 he learned that he was going to face two separate, consecutive trials that were likely to drag on for more than five years, during which time he would be unable to see or speak to his wife. He was 65 years old, facing up to fifteen years behind bars. The conviction rate in Japan was 99.4 per cent. Perhaps he had begun to regret his stubbornness in the Kosuge jail by this point. But perhaps not: by the time he learned of the double trial, he had already had four clandestine meetings with the son of Michael Taylor, a former Green Beret who specialised in springing wealthy people out of tricky situations in foreign countries, and an escape plan was largely in place. A few days later it went into effect.
Retracing the steps of Taylor’s team on Ghosn’s last day in Japan, you might think the plan had been dreamed up by a couple of 14-year-old schoolboys, so fantastically improbable does its success still appear. It required Peter Taylor, a burly, buzz-cut ex-marine, to convince Japanese immigration officials that he was in Osaka to perform with the violinist Taro Hakase. It featured a wad of $10,000 yen tied in a hairband to ‘tip’ a departure gate official in Osaka. And it counted on almost miraculous levels of ineptitude from the private detectives hired to monitor Ghosn.
Some of the details remain hazy, such as the degree to which Ghosn’s wife and family were involved. But Greimel and Sposato piece together enough details to deliver a vivid account of the escape itself, with Ghosn travelling, incognito, by bullet train, before being smuggled onto the plane. Some of his abettors paid a steep price: the Taylors were extradited from the US to Japan, where they are both now in prison. Kelly is still awaiting the verdict of his trial. The story might not offer quite the deranged immediacy of watching John DeLorean agree on camera to transport $24 million worth of cocaine in order to get his beleaguered factory out of a cash crunch, but it certainly has the essential qualities of a great plot: total surprise and – looking back – total inevitability. Of course the man who rescued Nissan was going to rescue himself!
The larger question of the extent and nature of Ghosn’s guilt remains unanswered. Compelling evidence that the prosecutors sought to damage him by mounting a fishing expedition – or ‘potato harvest’ as the Japanese call it – doesn’t alter the fact that they reeled in some pretty big potatoes. Ghosn’s defence wasn’t so much to deny that he had done the things he was accused of as to provide alternative explanations for them, or to point out weaknesses in the prosecutors’ narrative. If Nissan really believed the Omani distributor had been handing him kickbacks, for instance, then how come the companies were still doing business two years later? If he was really so fixated on boosting his salary, why hadn’t he taken one of the offers from the American firms?
‘I have not fled justice,’ Ghosn declared on landing safely in Lebanon, which has no extradition treaty with Japan. ‘I have escaped injustice.’ A few days later he held a press conference in Beirut. Fresh from his astounding feat, he cuts a manic, slightly raddled figure in the YouTube video: eyes flashing, cheeks pink and puffy, arms chopping and slashing theatrically as he unveils his rapid-fire slideshow of supposedly exculpatory documents (no one could actually read them) while delivering a point by point rebuttal of the allegations against him. It’s an appealingly wild performance, though after a while you notice his way of glossing over awkward detail as well as – almost more troubling – his sometimes reckless candour. Around 55 minutes in he gets to the business about his sister’s consultancy fee. His sole justification for the payout appears to be that she was the head of the Rio Chamber of Commerce and therefore in a position to swing ‘incentives’ for Nissan to build a factory there. Bribery, in other words. But it doesn’t seem to cross his mind that there might be anything wrong about that.
Guilty or not of the crimes, Ghosn was clearly guilty of the sins, the creature of a business culture that regards staggering levels of remuneration as the natural entitlement of its leaders. That wasn’t how things worked in Japan, and he paid the price. Yet as a motive crude greed doesn’t quite ring true. A kind of tragi-comic vainglory emerges from Collision Course – touching, appalling, half-conscious though never quite ironic – that is perhaps closer to the source of what drove him. You can hear it in his self-serving bluster about turning down Ford and GM – ‘a captain of the ship doesn’t leave the ship in difficulty’ – or in those laughably (in hindsight) solemn calls for ‘transparency’ or for profit-sharing ‘in the most honest possible way’.
But it operated at a more spectacular level, too. In 2014 he spent nearly $800,000 of Nissan’s money on a party at Versailles where 160 guests mingled with actors and musicians dressed in Louis XIV costumes before a sit-down banquet followed by fireworks. Two years later he hired the palace again for his wife’s birthday party (the theme this time was ‘Marie Antoinette’). The events were mocked for their tone-deaf pageantry, and both came under scrutiny in the fraud investigations. The first was supposed to have been a celebration of fifteen years of the alliance, but almost no one from either company was invited. In the video of his Beirut conference, Ghosn rattles off a peremptory explanation and dismisses the Ancien Régime comments as cheap jibes. But as he goes on to recap his single-handed triumphs at Nissan – and to crow over its sharp decline after his removal – it’s impossible not to marvel at the folie de grandeur.
Video footage of the first Versailles bash shows him at his imperious peak, strutting among the luminaries as they make their way through the Hall of Mirrors and the Gallery of Great Battles to a candlelit table the length of a small runway. Most of the guests, including Jeff Bezos, look a little uncomfortable, unsure whether to gawp or pose. But Ghosn is clearly in his element. And just in case anyone doubts it, a dancer dressed as the Sun King himself in plumed Apollo outfit takes up position behind Ghosn at the centre of the table, bowing to his latter-day avatar with an elaborate flourish. What need for anyone else from the alliance, you can almost hear Ghosn thinking. L’alliance c’est moi.
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