Update – Poor Carlos He’s Been Totally Abandoned – #41
Not only did the Good-Old-Boys in Japan replace him from his job at Nissan and Mitsubishi, now Renault Caved in under union and French government pressure, and will dismiss him from his job as Chairman at their next Board meeting on Thursday January 24th. On top of all this he’s been in jail since November 19thwhere he’s been held in isolation without access by anyone except his Japanese lawyer who knows which side his bread is buttered on – he can’t even get Carlos out on bail – or maybe it’s payback time for successfully messing with Japanese culture over the last two decades. One has to be reminded that in Japan life-time employment was a guarantee at the time Carlos chose to break it and save Nissan from bankruptcy creating unemployment for 21M+ employees. He probably developed a growing hunger for arrogance as his star kept rising with the younger Japanese population. Most recently he was planning to replace the CEO Saikawa, a longtime veteran at Nissan, for not having a strategy in place for the North American Market. Events seem to be supporting a well developed plan to get rid of Mr. Goshn that was executed with accuracy and determination by the good-old-boy network both in Japan and France.
Let’s review the charges against Mr. Goshn:
- FIRST, he’s charged with understating his compensation eight years of Nissan financial reports.
- SECOND, He’s charged with using Nissan to pay a Saudi friend who had helped him with a personal financial problem.
It is interesting to note that the objective of having Mr. Goshn spend time in isolation was to break him down so that he would confess to the above charges. He denies everything associated with the charges and continues to do so. He indicates that he kept records at Nissan of how much he thought he was worth but describes it as a hypothetical calculation that didn’t bind Nissan to pay him anything beyond his publicly reported compensation. He also says that Nissan received valuable services from the Saudi company and paid it appropriately. Renault has audited all compensation and expense data on their records, and clearly identified a clear slate. The Tokyo court that received his second bail request on Friday, did not grant it, and the best estimate of a trial that might take another two months in jail where Mr. Ghosn is being questioned every day with the on-going objective of getting him to confess to the above charges.
The gutless French couldn’t stand-up to the good-old-boys in Tokyo, by keeping Mr. Bollord as acting Chairman of the board for a few months longer, to make sure that this whole case was not a frame-up by the good-old-boys at Nissan. Its in the best interests of Renault if he steps down – it will be interesting to see whether he will give in to the scalp hunters at Renault – if he does give in – I hope is working on a Big Settlement. These same Renault executives asked Nissan for a board meeting as the majority stockholder late last year – only to receive an answer that Nissan can’t have a board meeting until later this Spring – so Renault went away in with hardly a whimper.
Nobody has asked key questions like what monetary losses did Nissan suffer from Mr. Ghosn’s actions. They originally threw a whole bunch of accusations against the wall – one of which was the ownership of global residences by Mr. Ghosn – that charge went away – when it was established that the residences were owned by Nissan and that they had grown significantly in value over the years. Where was Nissan’s internal and external audit team? How many internal/external auditors have been fired for not having good global compensation plans, expense controls, and properly structured retirement systems for global alliance executives? Meanwhile, a man who built a business of 10 Million cars a year, while running a very complex alliance of 4+ car manufacturers, was serving a sentence of solitary confinement and not being granted bail. His health has deteriorated from the grueling conditions that he is being exposed to.
Mr. Ghosn was guaranteeing the bail bond of $600 million and other factors such as paying for a Tokyo apartment, security forces and systems to include an electronic ankle bracelet for a tracing capability. The judge refused the bail requested last Friday which insured that Mr. Ghosn won’t get out of jail, until after a formal trial, which will be held at least several months from now, if not more. I predict that the charges against Mr. Ghosn will be dropped shortly after Thursday’s Renault Board meeting in which Mr. Ghosn will be replaced. I sincerely hope he doesn’t retire voluntarily due to the fact that the evidence in question is not deserving of the penalty he is facing in Japanese justice systems. Dropping charges will make the Japanese appear like heroes, and avoid having to confront Mr. Goshn in court. The evidence is thin and while I am sure some of the events did happen, because greed along with arrogance continues to grow invincibility. In two decades, I could find something wrong on anybody.
The Management Lesson to be learned is that a Manager /CEO/Chairman should have everything approved by the appropriate areas of the firm and cast in a written document. You and Your Reports deserve this strategy to be in place to avoid incidents that can have such serious career impacts. Stop thinking that You can “Trust” anyone – Suspect but don’t accuse – should be your motto. The days of “Trust” are and have been over for a long time. Remember “Golde’s Rule” –write your expense report as if it would appear on the front page of “Tomorrows WSJ.”
We plan to keep you posted, and please let us know your feelings and observations. Do you agree with me on the good-old-boys role in Japan and the Scalp Hunters in France?