Daily Management Review

Carlos Ghosn To Remain Head Of Renault Despite Pressure On The Car Maker


Carlos Ghosn To Remain Head Of Renault Despite Pressure On The Car Maker
Despite pressure from the French government and an anticipation by Nissan of removing Carlos Ghosn as the Chairman and CEO, French auto maker Renault has decided not to remove him from, the post even though Nissan is set to do so. Ghosn was also the chairman of Japanese car maker Nissan and was arrested in Tokyo in on Monday on charges of financial irregularities as the chairman of Nissan under Japanese law.
While promoting Thierry Bolloré as the deputy chief executive and run the company, Renault’s made it clear that the appointment of Bolloré was done on a “temporary basis” to run the company in the current absence of Ghosn.
Ghosn is also the chairman of Mitsubishi and is creator and head of the car manufacturing alliance between Renault, Nissan and Mitsubishi.
Both the other partners of Renault have already decided to remove Ghosn from the posts and the company but Renault has openly contradicted the decisions of its partners. Initially, the charges against Ghosn were brought by Nissan. The charges include Ghosn allegedly undet-reporting his year compensation at Nissan for years now in documents submitted to the Tokyo Stock Exchange and had allegedly misused company money to meet his personal finance needs.
“The board is unable to comment on the evidence seemingly gathered against Mr Ghosn by Nissan and the Japanese judicial authorities,” Renault said in a statement following the board meeting.
Nissan was asked by Renault to share all of the evidence against Ghosn “on the basis of the principles of transparence, trust and mutual respect set forth in the Alliance Charter”.
In a memo to staff published on an internal website, Bolloré had written on Tuesday morning that the “full support” of senior executives was still enjoyed by Ghosn.
Nissan has claimed that the allegations against Ghosn were first brought out by a whistleblower. The controversy surrounding Ghosn, one of the most known faces of the global auto industry, has shaken up the industry as well.
Ghosn is also credited with forging the most unlikely alliance between France’s Renault and Japan’s Nissan and Mitsubishi which is the second largest car maker in the world. He is also critical for the functioning of the alliance.
There were calls for replacing Ghosn in Renault, following his arrest in Tokyo. Ghosn had to step down from the French carmaker, Bruno Le Maire, the French finance minister, had said on Tuesday. The French state owns about 15 per cent stake in Renault. The French minister had said: “Carlos Ghosn is no longer in a position where he is capable of leading Renault,” Le Maire told France Info radio. “Renault has been weakened, which makes it all the more necessary to act quickly.” He however stressed that the alliance of the three car makers should continue as it is.
However the importance of Ghosn for the alliance was highlighted by Osamu Masuko, Mitsubishi’s chief executive, who said on Tuesday that he believes that the three car makers of the alliance needed to appoint separate new chairs since it was not possible to replace the abilities of Ghosn and hence his role should be attempted to be fulfilled in aocmbined manner. “I don’t think there is anyone else on earth like Ghosn who could run Renault, Nissan and Mitsubishi,” Masuko told reporters in Tokyo.