Even in the current unpredictability of our news cycle, I don’t think anyone could’ve fathomed a reality where we’d wake up to headlines that Carlos Ghosn—the ruthless turnaround artist who saved Nissan from the brink nearly 20 years ago and united it with Renault and then Mitsubishi—would be arrested on charges of financial misconduct and soon to be ousted from his roles at the conglomerate. It is a shocking and ignominious end to one of the most powerful figures in the modern automotive industry.
In some ways, you could argue, Ghosn was the most powerful at present. The French-Brazilian executive served as chairman of Nissan and its former CEO, chairman of Mitsubishi, and chairman and CEO of Renault.
Together they make up what is occasionally the biggest car company in the world, depending on how Volkswagen and Toyota are doing that month. And it’s unlikely that that alliance—which at various times has saved each car company from crisis or outright extinction—would have happened without Ghosn at the helm.
Naturally, serving in these various roles for more than 20 years made him very wealthy, many times over. So to see it all collapse on allegations that he conspired to underreport his income and used company assets for personal benefit comes as such a surprise.
And while the conglomerate he helped build will surely survive without him, it will face great upheaval in the process.
A truly global citizen, Ghosn was born in 1954 in Brazil to a Lebanese family and received his higher education in Paris. He began his career with tire company Michelin, first in France and then revitalizing its South American operations as a young manager. He eventually served as CEO of Michelin North America, before moving to an ailing Renault in the late 1990s and working to stem much of its cost-hemorrhaging.
Indeed, this is the quality Ghosn would be most known for in his career. His work at Renault—which as French car companies tend to do was fat, wasteful, burdened with too much overhead and struggling to stay afloat—earned him the nickname “le cost killer” in France. It’s not an especially positive title, as he himself mused in an interview with the Financial Times earlier this year:
“It’s sexy, there’s blood in it, there’s meanness,” he says. “But everybody starts by being Le cost killer. If a revival plan is only about cost-cutting, it will last two years; revival is when after 15 years the company is still on the right track.”
He would come to be known on the global stage for his next act, which was creating the unlikely union of Renault, a company part-owned by the French government, and Nissan, a Japanese giant that spent most of the ’90s struggling after a disastrous recession derailed decades of what once felt like unlimited growth.
As Forbes reflected a few years ago, by 1999 Nissan was nearly bankrupt and hoping for a marriage with Daimler, which partnered with Mitsubishi and later Chrysler instead. (Remember, this was a whole era of consolidation across the industry, only a few examples of which worked out well.) Renault purchased a one-third stake in Nissan as Ghosn overcame culture clashes and closed plants, cut tens of thousands of jobs and reduced waste across the board, all while keeping the two companies relatively separate.
His revival of the company made him an unlikely hero in Japan, even spurring a manga about his life and career. By 2005 he was CEO of both Nissan and Renault, making him the first person to run two Fortune 500 global companies at the same time, and he was often in consideration to come run Ford or General Motors as they struggled through that decade.
At the same time, it always felt like the priority on cost-killing above all else had a detrimental effect on Nissan in particular. These days the company’s brand identity is more defined by Star Wars tie-ins and cash-on-hood deals advertised during Monday Night Football than anything concrete like design or engineering. It doesn’t make a car that’s truly a leader in any segment, besides maybe the GT-R, and even that has been on the market for more than a decade.
Ghosn may have saved Nissan, but it often came at the expense of anything interesting.
Still, from a business perspective it’s impossible to discount the success both companies have had together. And Ghosn’s Alliance grew even bigger two years ago when it added Mitsubishi to the mix following a devastating fuel economy cheating scandal in Japan, a kind of shitty, low-rent Dieselgate that involved over-inflating tire pressures to get better results. Nissan seized a 34 percent stake in Mitsubishi, rescuing it from disaster and allowing the companies to pool resources on factories and electrification. (Indeed, under Ghosn’s reign the Alliance also became an early leader in electric vehicles and hybridization, a gamble that could pay off in big ways in the decades to come.)
And, as was to be expected, his work life seemed insane. Here’s a snapshot of that from the Wall Street Journal:
You have to be extremely disciplined and extremely organized. I have four places where I work. One is Amsterdam, where I am managing the synergies of the alliance; then you have Paris for Renault and then in Tokyo I have two places—headquarters at Nissan and my office at Mitsubishi—on top of going from time to time into the operations just to make sure that we don’t lose contact with the reality. You know, the United States, China, India, Brazil, Russia and Europe.
Here’s the thing, though: Ghosn was on the way out. Slowly, sure, but still on the way out. At 64, all three companies were beginning to envision their eventual futures without him at the helm. In early 2017 he stepped down as CEO of Nissan and handed the role to then-co-CEO Hiroto Saikawa, while retaining his chairman role there and at Mitsubishi and chairman and CEO roles at Renault.
Throughout history it’s often easy and lazy to ascribe too much importance to any one individual without giving credit to, say, a group or other cultural or societal forces at work. But Nissan, Renault and now Mitsubishi would not be where they are if not for Carlos Ghosn.
Additionally, he was among the last of the “super” CEOs and chairmen of the car industry, one with multiple, powerful roles within a conglomerate of companies. Ferdinand Piëch, who ran the Volkswagen Group and its various brands with an iron fist and deep family ties, left (or was ousted) years ago. Sergio Marchionne, the turnaround artist of Fiat Chrysler, passed away earlier this year. You could argue Jacques Nasser of Ford when it ran Jaguar, Volvo, Land Rover and Aston Martin could fit into that group, but those days are long gone.
But that’s what makes today’s news so bizarre, and so perplexing. If these allegations were true, why was Ghosn—the legendary cost-killer—under-reporting his own income toward the end of his tenure? Why does the company claim no one else was involved save for board member Greg Kelly? Surely an investigation will uncover similar behavior, or others involved, yes? And what happens to the Alliance without its chief architect at the helm?
It’s a strange ending to the saga of Le Cost-Killer, and what happened here and comes next may be worthy of its own comic book.