With Ghosn gone, Saikawa gets green light for new direction at Nissan

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TOKYO — For nearly two decades, Nissan CEO Hiroto Saikawa had been the faithful protégé of high-flying frontman Carlos Ghosn. But that all came crashing to an end last week.

Saikawa is now using Ghosn’s ouster to undo much of his erstwhile mentor’s work at Nissan Motor Co. If it seemed the 65-year-old would be a transitional chief, he’s suddenly talking like a transformational one, eager to get the carmaker back on track in Japan and the U.S.

To clear the way, Nissan’s board removed Ghosn as chairman and representative director Thursday, Nov. 22. It also appointed a committee led by outside directors to further investigate Ghosn’s alleged abuses, overhaul the company’s governance and nominate a new chairman from the current board.

Mitsubishi Motors Corp., where Ghosn also is chairman, is expected to dismiss him from that role as well at an extraordinary board meeting this week.

“In one word, this is a soft coup d’etat,” said Tatsuo Yoshida, a senior auto analyst at Sawakami Asset Management who worked at Nissan during the beginning of Ghosn’s tenure. “There has been anti-Ghosn sentiment accumulating for a long time.”

Saikawa launched his purge of Ghosn’s legacy just hours after Ghosn, 64, was arrested in Tokyo for alleged financial misconduct. At a hastily called late-night news conference, Saikawa began by slamming his longtime colleague as the “mastermind” of “significant” fraud.

Saikawa then rebuked the disgraced chairman — long hailed for saving Nissan from bankruptcy — as a growing liability in recent years. He blamed Ghosn for dangerously concentrating too much power in himself, losing touch with daily operations and neglecting Japan.

“This is the negative side of Mr. Ghosn’s long regime,” Saikawa said of the man who landed at Nissan as COO in 1999 and led as CEO from 2001 until last year.

“He remained in power for many years. In real day-to-day operations, there seems to be a negative impact,” Saikawa said. “These issues have become more prominent lately.”

New direction

Saikawa pledged to take “visible countermeasures” to rectify Nissan’s course.

“This will give us a good opportunity to revise the way we work,” Saikawa said.

Executives will keep a closer eye on operations, he promised. The company will also redouble its focus on Japan, a crucial market in which sales had slumped under Ghosn: Deliveries in fiscal 2018 were down 31 percent from 2005’s level.

And more importantly, Saikawa said, Nissan will work to reform the delicate management structure that bonds Nissan with French partner Renault and smaller Japanese ally Mitsubishi into a corporate alliance of complicated cross-shareholdings.

In another swipe at Ghosn, Saikawa said Nissan will seek a “fairer” management setup that doesn’t rely on one charismatic personality to hold it all together.

“That is a major issue,” Saikawa said. “Some things should be corrected, like the overconcentration of power in an individual that resulted in distortion.”

Even before Ghosn’s stunning downfall, Saikawa had begun blazing a new direction.

Before the fall

Carlos Ghosn’s role at the alliance partners was dominant, until his Nov. 19 arrest.


Boulogne-Billancourt, France
Carlos Ghosn*
Carlos Ghosn*

Yokohama, Japan
Carlos Ghosn**
Hiroto Saikawa

Carlos Ghosn***
Osamu Masuko

Carlos Ghosn
Carlos Ghosn

*On Nov. 20, Philippe Lagayette was named acting chairman, and Thierry Bollore was appointed deputy CEO.

**Ousted on Nov. 22.

***Board expected to vote week of Nov. 26 on whether to dismiss Ghosn.


Among his first moves was rolling back the self-destructive sales practices the former CEO foisted upon the U.S. Ghosn’s pursuit of rapid U.S. sales growth spurred the company’s addiction to generous incentives and sizable fleet sales.

The result was tarnished brand value and deteriorating profitability, the prices for briefly touching the long-cherished goal of a 10 percent U.S. market share. The figure is now 8.6 percent.

Saikawa also shuffled management in ways some observers said re-engaged the carmaker’s Japanese roots. Among the changes, he appointed a Japanese CFO, Hiroshi Karube, and the first Japanese head of global communications in more than a decade.

“Mr. Saikawa’s been taking an independent path,” said Christopher Richter, an analyst at CLSA Asia-Pacific Markets. “A lot of these strategies are different from the Ghosn era.”

Risks ahead

Saikawa may have a more personal reason to distance himself from Ghosn.

Analysts say the Nissan chief runs a risk of being entangled in the criminal investigations swirling around his predecessor and disgraced board member Greg Kelly. The latter, an American executive long involved in human-resources matters, was also detained by authorities and under investigation as Ghosn’s co-conspirator.

Nissan stripped Kelly of his status as a representative director last week.

Although Ghosn was removed as chairman and both men lost their standing as representative directors, each retains a seat on the board as a standard director. That status can be revoked only through a shareholder vote, something Nissan’s board is expected to pursue.

Details of the criminal case are fuzzy. But Nissan accuses Ghosn of three financial misdeeds.

Ghosn allegedly underreported his income in official stock market filings, diverted corporate investment funds for personal use and misused company expenses.

Japanese media say the misdeeds began around 2011 and spanned five years. Commentators want to know why Nissan, and Saikawa as a board member during that time, didn’t spot something. Japanese media reported last week that prosecutors planned to meet with Saikawa to ask him the same thing.

“There is the possibility that Saikawa and other board members might be fired,” said Koji Endo, a senior auto analyst at SBI Securities Co. “Why wasn’t someone aware of the misconduct?”

Saikawa’s denunciations of Ghosn were all the more shocking in Japan because Saikawa was long seen as Ghosn’s right-hand man.

Ghosn parachuted in as the Renault-installed “cost-killer” to revive the struggling automaker through fiscal discipline. But it was Saikawa who won Ghosn’s trust as the enforcer who helped break the keiretsu of affiliated suppliers in the early days of the revival. And later, as chief competitive officer, he helped Ghosn chart the company’s course.

“We all thought Saikawa was on Ghosn’s side,” Endo said. “He was promoted to president only because he was a yes man to Ghosn. But at the same time there was a growing faction of people even on Ghosn’s team who apparently didn’t like his management approach.”

Saikawa said a Nissan whistleblower called out Ghosn’s misdeeds, sparking a months-long internal probe. He declined to offer details, citing the ongoing criminal investigation.

Japanese media have since suggested two whistleblowers. National broadcaster NHK identified one tipster as a non-Japanese executive working in Nissan’s legal department. The person shared information with prosecutors in return for lenience under a plea-bargain system adopted by Japan just this year, NHK said.

The person was involved in the purchase of overseas properties for Ghosn’s exclusive use with company funds funneled through a subsidiary in the Netherlands, NHK said.

Japan previously had no plea-bargain system, and this was just the second time the legal maneuver had been exercised since the rules were rewritten in June, the report added.

Saikawa was co-CEO with Ghosn during a one-year transition before taking control as solo CEO last year. But since then, Saikawa’s tenure has been besieged by scandal.

The first crisis erupted late last year when Nissan disclosed it had been conducting faulty final inspections of vehicles at assembly plants throughout Japan.

That triggered the recall of more than 1.2 million vehicles here, a callback of virtually every passenger car the company produced for sale in Japan over the previous three years.

More inspection misconduct was uncovered this year, and Nissan is on an embarrassing regimen of filing reports to Japanese regulators on its progress in preventing a relapse.

And now come the shocking allegations of malfeasance at Nissan’s highest echelons.

Hiroshige Seko, head of Japan’s powerful Ministry of Economy, Trade and Industry, and Transportation Minister Keiichi Ishii warned Nissan to improve corporate governance.

Meanwhile, Nissan Senior Vice President Hitoshi Kawaguchi was dispatched to Tokyo to apologize in person at the prime minister’s office for the company’s ignominious state of affairs.

Some analysts say the whirlwind of uncertainty may create a need for Saikawa to stay at the helm until the storm passes. Saikawa is Ghosn’s elder by a few months, but Nissan has neither a limit on the number of terms a CEO may serve nor a mandatory retirement age.

“He is not that old by Japanese standards,” said Yoshida, the Sawakami analyst. “And he has the chance to take full control of the company. Saikawa is expected to be here another couple of years.”

Naoto Okamura contributed to this report.

Related Stories

How they got Ghosn

» Battle lines within the Nissan board: A who’s who

» The deceptively high price of an untangled alliance

» Inspection scandal fueled dissatisfaction

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