HOWTO ESCAPE FROM JAPAN
Ghosn better watch his back... Japan won’t remember this loss of face on the world stage. Ghosn’s value to the automotive alliance is becoming more evident in his absence... According to the Wall Street Journal , he spent the past 20 years brokering conflicts between the constantly bickering companies. Now that he’s gone, they’ve reverted to “a nasty and brutish state of nature.” That’s a reference to 17th-century English philosopher Thomas Hobbes’ classic book, Leviathan . It’s devoted to the idea that, without powerful central governments, humans will live in a war-like state pitting “every one against every one,” leading to “solitary, poore, nasty, brutish and short” lives. The irony, of course, is that powerful governments are often at war against their own populations... The “War on Drugs,” for example, is a war on (mostly uneducated, poor) people, not chemical substances. And as Ghosn tells it, Japan is certainly at war with him. Maybe if Nissan and Renault’s share prices keep falling, they’ll break up the alliance and go about their businesses alone once again. Mitsubishi, where Ghosn served as chairman, was also part of the automotive alliance. The three companies were collectively the world’s second-largest carmaker at one point. And as Ghosn pointed out in Beirut, they’re the only three large carmakers whose share prices fell last year.
difficult to work with... Those traits make him seem petty to me. I also can’t help but view his tale as a cautionary one of “disconnection and entitled excess,” as Bloomberg Businessweek magazine put it a year ago. There’s also the pesky allegation from the U.S. Securities and Exchange Commission (“SEC”) that he “fraudulently concealed $140 million in benefits and compensation from investors.” Ghosn quickly settled with the SEC for $1 million and a 10-year ban on serving as an officer or director of a public company in the U.S. It sounds a lot like the Japanese charges, and also involved Greg Kelly, an attorney who was arrested in Japan at the same time as Ghosn. Still, it’s widely acknowledged that Ghosn saved Nissan during his tenure, which began in 1999... I bet many folks in Japan are happy about that. He did it through some very un-Japanese techniques, like closing manufacturing plants and laying off workers. (There’s a whole book about it – Turnaround: How Carlos Ghosn Rescued Nissan by David Magee. You can find the book on Amazon right here.) But that nontraditional strategy didn’t stop the Japanese people from liking Ghosn enough to stop him on the street to take photos. And investors are likely sad to see him go, too... Nissan and Renault’s share prices have fallen roughly by a third since Ghosn was arrested in November 2018 (and by roughly half since both companies’ stocks peaked in early 2018).
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February 2020
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