Nissan Might Have Paid Stanford Tuition for Carlos Ghosn’s Kids

Illustration for article titled Nissan Might Have Paid Stanford Tuition for Carlos Ghosn’s Kids

More talk about former Renault CEO Carlos Ghosn’s finances, Uber expands its reach into the Middle East, lawsuits against Elon Musk and Tesla over the Model 3, minivans sitting on dealer lots and Boeing 737 Max 8 news. All of this and more in The Morning Shift for Tuesday, March 26, 2019.


1st Gear: Carlos Ghosn’s Kids Got Free College, Perhaps

In a saga that may just become as drawn out as Dieselgate someday, the new reports about Carlos Ghosn’s financials while he was in top roles at Nissan and Renault are that Nissan might have just paid about $600,000 for his children’s Stanford University tuition.

Ghosn, arrested over financial-misconduct allegations from Nissan late last year, got out of jail on $9 million in bail earlier this month. Word from the month of his original arrest was that he allegedly underreported nearly $90 million in compensation.

All four of Ghosn’s children graduated from Stanford, according to a 2018 report in the Financial Times, and Bloomberg now reports that people familiar with the matter said they might have been there on a tuition-free ride from Nissan. The tuition payments would have spanned between 2004 and 2015, according to the report, and would have been worth at least $601,000 based on fee schedules.

This just has to do with the tuition, Bloomberg reports, and isn’t to be confused with the recent college-admission scandals—Bloomberg made sure to clarify that “no such payments are alleged in Ghosn’s case.” Bloomberg did, however, write that the tuition benefit “isn’t common among top executives.”

From the story:

[I]t’s “highly unusual” that Nissan would pay his kids’ university fees, according to Robin Ferracone, chief executive of Farient Advisors, an executive-compensation consulting firm based in New York City and Los Angeles.

“Typically you only see tuition reimbursements as part of expatriate assignments, and those are for kids below university age,” Ferracone said.


If the sources are correct, these tuition payments were also known by Ghosn’s employer as part of his compensation, unlike some of the other alleged financial trouble he’s been in. One of the people who spoke to Bloomberg, who asked not to be named as the information isn’t public, claimed the tuition was part of Ghosn’s contract from 1999. While Bloomberg cited no hard evidence, the report said Nissan and Ghosn’s lawyer in Paris declined to comment. A spokesperson for Stanford didn’t respond to requests for comment, Bloomberg wrote.

There’s more on the whole story here.

2nd Gear: Uber Buys Middle Eastern Ride-Hailing Giant Careem for $3.1 Billion

Uber’s expanding its reach in the Middle East, and doing so in a big way: On Tuesday, the company announced that it’s buying Middle Eastern ride-hailing giant Careem for $3.1 billion—$1.7 billion of that coming in convertible notes, and the other $1.4 billion in cash. Careem calls itself the No. 1 ride-hailing app in Middle East and North Africa region, Pakistan and Turkey.


The purchase will make Careem a wholly owned subsidiary of Uber and let the company keep its branding and leadership, and CNN reports that it’ll have more than a couple of benefits for Uber as a company:

In an email to Uber staff members seen by CNN Business, CEO Dara Khosrowshahi said keeping the Careem brand and operations “has the advantage of letting us build new products and try new ideas across not one, but two, strong brands.”

Uber is gearing up for an initial public offering that’s expected to take place later this year. It’s reportedly seeking a valuation of as much as $120 billion. Combining with Careem will give Uber dominance over the Middle East region and could help the US company trim its losses. [...]

Careem has used home field advantage and local knowledge to make life difficult for Uber since the American company entered the Middle East market in 2013.

Careem’s biggest investors include Rakuten (RKUNF), Didi Chuxing, Daimler (DDAIF) and the Saudi government, which has also poured billions into Uber.


The acquisition, Uber’s announcement said, is subject to regulatory approvals and expected to close in Q1 of 2020.

3rd Gear: Judge Dismisses Lawsuit Against Tesla, Elon Musk Over Model 3 Production

For the second time, Reuters reports that a federal judge in San Francisco dismissed a securities-fraud lawsuit by Tesla shareholders, which alleged that Tesla made misleading statements about the production status of the more budget-oriented Model 3.


U.S. District Judge Charles Breyer dismissed the lawsuit from October of 2017, and it’s the second time he’s done so—Reuters reports that Breyer dismissed the original one in August, but allowed the plaintiffs to file an amended version. It didn’t help much, in their case.

From the story:

The lawsuit sought class action status for shareholders who bought Tesla stock between May 3, 2016 through Nov. 1, 2017.

It said shareholders bought “artificially inflated” shares because Musk and other executives misled them with bullish statements about the production ramp of the Model 3, failing to disclose that the company was “woefully unprepared” for the vehicle’s production.

Tesla argued in its defense that it had been forthcoming about challenges with Model 3 production, including repeated statements by Musk that Tesla was undergoing “production hell.”


Reuters reports that Breyer, in dismissing the lawsuit, said its fraud allegations ignored Tesla’s “repeated warnings about Model 3 production risks.”

4th Gear: Fiat Chrysler Shortens Shifts at Canadian Minivan Plant to Account for Vans Sitting on Lots

Fiat Chrysler’s minivans aren’t selling as quickly as they were last year, and that usually leads to a couple of outcomes in the short term: plant shutdowns and shortened work shifts. Automotive News reports that FCA’s Canadian plants are about to face the latter in order to adjust for dealer inventories.


FCA Canada wouldn’t give details on the shift adjustments, Automotive News reports, but said that the plant should be back up and running normally in April. From the story:

“We are not providing details beyond the statement,” Gosselin said when asked specifically whether the line has been slowed to stem production or the actual time an employee spends in the factory is being shortened.


The Windsor plant that builds the Dodge Grand Caravan, Chrysler Pacifica and the Chrysler Pacifica Hybrid has about 6,000 employees and builds nearly 1,500 vans per day at full capacity, according to Automotive News, and FCA’s already temporarily idled it three times this year.

And while Pacifica sales in the U.S. last year had almost no change from the year before at nearly 120,000, things aren’t as on par this year.


From Automotive News:

The Pacifica had 88 days of supply in the United States as of March 1, 2019, according to the Automotive News Data Center in Detroit. The Grand Caravan had 20 days of supply. Similar data isn’t made public in Canada.

U.S. sales of the Pacifica are down 24 percent to 14,817 units through February while Grand Caravan sales are down 27 percent to 19,634 units.

Pacifica sales in Canada are down 54 percent to 512 units through the first two months of 2019. Grand Caravan sales are down 20 percent to 4,836 units.


This summer, Automotive News reports, a senior union official said FCA is expected to start gearing the Windsor plant toward adding an all-wheel-drive powertrain to the Pacifica.

5th Gear: China Won’t Take Boeing 737 Max 8 Applications for Airworthiness Until It’s ‘Determined’ the Plane Is Airworthy

China was one of the first to ground the Boeing 737 Max 8 after an Ethiopian Airlines flight became the second model of the plane to crash in the span of a few months, killing all 157 people on board, and Reuters reports that the country isn’t currently accepting airworthiness-certification applications for the plane.


The country’s civil aviation regulator won’t start reviewing the applications again, Reuters reports, until it’s “determined that the aircraft is airworthy.”

Word about the applications came from an official from the news department at China’s civil aviation regulator, according to Reuters, who said the regulator hasn’t taken applications for the 737 Max 8’s airworthiness certification since March 21. Reuters also wrote that the regulator sent staff to investigate and review design changes to the plane, citing other reports.


From the story:

Earlier on Tuesday, financial magazine Caijing reported that the Civil Aviation Administration of China (CAAC) had suspended certification for Boeing 737 MAX 8 aircraft, citing an internal document issued on March 21.

“Given the aircraft faces uncertainties in its airworthiness, after studying, it is decided that (the regulator) will stop issuing Boeing 737 Max 8 airworthiness certification immediately,” the CAAC was quoted by Caijing as saying, adding that the ongoing investigation had not ruled out the possibility of an aircraft design issue.


Boeing didn’t respond to a request for comment, the story said, but Reuters cited Caijing in writing that industry insiders said it took the company a year and three months to get a CAAC airworthiness certification for the 737 Max 8 originally. It obtained the certification in October of 2017, the report said.

Reverse: Ford Sells Jaguar Land Rover to Tata

Tata Motors bought Jaguar Land Rover from Ford Motor Company on March 26, 2008, according to a then report from the New York Times. The deal was for $2.3 billion.


Neutral: What Would You Do With Four Degrees’ Worth of Free Tuition?

Buy a lot of stuff, probably.

Staff writer, Jalopnik



1st Gear: What’s wrong with that? I mean, my company has small scholarships available for the children of employees. We just have to fill out the forms and apply for them based on merit. That’s the same thing that happened here, right? Right guys?