Ghosn regrets what might have been

BEIRUT — As he seethed over his arrest, his ouster from power and his portrayal as a greedy dictator, Carlos Ghosn admitted last week being seized by other emotions.

One of the most successful auto CEOs of the past generation is haunted by regret, blown opportunities and the road not taken. Indeed, more than one road not taken.

At a world media press conference last week in the Lebanese capital, the former chairman of Nissan, Renault and Mitsubishi ticked off a short list of alternative endings that he let pass, he says, in his drive to advance the global auto alliance he created.

Ghosn bemoaned his decision in 2018 to extend his contract as head of Renault, explaining that he did so under a requirement to further integrate the French automaker with Nissan. Ghosn also now regrets rejecting what he says was an offer in 2009 to head General Motors and spearhead its reorganization during the Great Recession.

Had he taken the other option in either case, Ghosn said, he wouldn't be facing the mountain of legal problems now before him. And he wouldn't have needed to flee to Lebanon at the end of the December to evade trial in Japan, where he is accused of financial misconduct at Nissan.

More than 100 journalists jostled and snapped pictures of the fallen industry titan who was led into the room by a phalanx of bodyguards. Ghosn, 65, jumped bail in Tokyo through a carefully planned international security operation that reportedly stowed him away in a crate to get him free of Japanese prosecutors.

Unleashing a feisty, combative and meandering self-defense, Ghosn said he was relieved to be free of the Japanese judicial system, which he decried as "rigged." But he wondered aloud at what might have happened if he had taken an alternate career path.

Ghosn said that, before being ousted as Nissan chairman, he had planned to combine Renault and Nissan under a holding company and to eventually fold Fiat Chrysler Automobiles into it for a megadeal that would have kept sales and profits pumping.

That plan came to a screeching halt with his November 2018 arrest in Tokyo.

"They said they want to turn the Ghosn page," he said of the executives who replaced him at Nissan. "Well, they have been very successful. They turned the Ghosn page. They turned the Ghosn page because there is no more growth. There is no more increase of profit. There is no more strategic initiative. There is no more initiatives, and there is no more alliance.

"What we see today is a masquerade of an alliance."

Ghosn faced up to 15 years of prison had he remained in Japan and been convicted. In Lebanon, where there is no extradition agreements with Japan, he is no longer fighting for his freedom but for his legacy.

"I am here to clear my name," Ghosn told the press. "I should never have been arrested in the first place."

Ghosn insisted he might never have been indicted if he hadn't been so loyal to the alliance. He could've gone to work for GM in Detroit.

Ghosn said that in the depths of the 2009 global financial crisis, when GM's collapse had it operating under federal government control, Ghosn was approached by Steven Rattner, President Barack Obama's car industry czar. Rattner came calling with a job offer to run GM. Ghosn said he turned it down.

"He was offering me a pay which was double my pay. I said, 'You know what? I understand your offer is very attractive. But a captain of the ship doesn't leave the ship in difficulty,' " he said.

"I made a mistake. I should have accepted the offer."

Another potential off-ramp came in 2018, when Ghosn's contract at Renault came up for renewal. Renault's board nominated Ghosn for another four-year term as chairman and CEO that February. But the board tasked him to take "decisive steps to make the Alliance irreversible."

Ghosn accepted the charge and, as instructed, began pushing for greater integration between Renault and Nissan. But the fear in Japanese circles that his efforts would lead to a complete merger spurred his enemies to hatch a corporate coup, Ghosn asserted.

"One of the reasons I'm in this situation today is because I accepted this offer to continue to integrate the two companies," Ghosn said. "Some of my Japanese friends thought that the only way to get rid of the influence of Renault on Nissan was to get rid of me."

Nissan Motor Co. and Japanese prosecutors see things differently. Last week they were compelled to issue separate statements addressing Ghosn's claims.

"He was not fit to serve as an executive," Nissan said in a statement, referring to a company investigation into what Nissan claims were financial improprieties. "The internal investigation found incontrovertible evidence of various acts of misconduct by Ghosn, including misstatement of his compensation and misappropriation of the company's assets for his personal benefit."

The Tokyo District Public Prosecutor's office said Ghosn skipped town, forfeiting $13.8 million in bail, to avoid the "consequences of the crimes he committed."

Ghosn said he had grand ambitions for the alliance under a planned holding company.

He envisioned the two automakers trading under a shared stock with a single board and chair. But they would maintain separate brands, separate headquarters and separate executive committees.

"It was not a full merger," he clarified of his blueprint. "I was trying as much as possible to overcome the resistance coming from the Japanese. I thought that a holding company was a very good balance between the wishes of a full merger from one side, and the desire for autonomy."

At the same time, Ghosn said, he was negotiating a merger with FCA. He said he planned a meeting, hoping to seal the deal with FCA Chairman John Elkann, in January 2019. Instead, he was in jail that month and the next, after his arrest Nov. 19.

Renault eventually followed through on the idea, inking an agreement to merge with FCA in May, but FCA later scuttled it, citing political interference from the French government. FCA is now instead merging with France's PSA Group, led by Ghosn's former lieutenant at Nissan, Carlos Tavares. Ghosn blasted the leadership of the Renault-Nissan alliance for blowing the opportunity.

"The alliance missed the unmissable, which is Fiat Chrysler," Ghosn said. "How can you miss that huge opportunity to become the dominant player in the industry?"

Ghosn decried the current state of the alliance, citing a plunge in profits and market capitalization. Since Ghosn's arrest, Renault's share price has dropped 28 percent, Nissan's has plunged 37 percent and Mitsubishi's has tumbled 39 percent.

Some analysts said Ghosn's biggest career success came early, with his revival of a nearly bankrupt Nissan in 1999. More recently, he struggled to keep the lineup fresh, manage brand value in the U.S., implement a successful emerging market strategy, and he created too much overcapacity in a race for volume, said Janet Lewis, former head of Asian auto research at Macquarie Capital Securities in Tokyo.

"He did great work 20 years ago, but the past five years he failed to invest in new models, leading to the oldest product lineup of all major automakers. He destroyed brand value with the focus on fleet sales to gain share and high incentives," Lewis said, adding: "He has effectively killed any reputation he might have had for rescuing Nissan with his destructive management in recent years driven by greed and narcissism."

Ghosn was particularly skeptical of the alliance's new management direction. The global partnership is trying to build a more consensus-driven governance to replace Ghosn's top-down approach. Last March, the three automakers established an Alliance Operating Board that seats the CEOs of Renault, Nissan and Mitsubishi and Renault Chairman Jean-Dominique Senard.

"The alliance is not going to work with consensus," Ghosn said flatly.

"What I would do is completely different from what is being done."

Back in Japan, Ghosn's jagged remarks landed with a thud. Hiroto Saikawa, Ghosn's handpicked successor as Nissan CEO and one of the leaders fingered by Ghosn as a coup conspirator, said the goal was never to break away from Renault but to improve the way the alliance worked.

"Rather than trying to get rid of the influence by Renault, we work with Renault as a partner. There are times when our opinions differ about a business direction. But that's business," Saikawa told reporters in Japan after Ghosn's Beirut press conference. "That is one thing. [Ghosn's] misconduct is another."

Added Saikawa, who stepped down as CEO last year: "I suppose he ran away simply because he was afraid of being found guilty in a Japanese court. Personally, I feel that I was betrayed yet again."

Naoto Okamura contributed to this report from Tokyo.