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Ghosn With the Wind: Nissan’s Former CEO Flees Japan, Now Resides in Lebanon

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Carlos Ghosn before his downfall. Photo courtesy of Nissan News.

Talk about a story filled with intrigue!

Former Nissan CEO Carlos Ghosn (pronounced Gone), under the watchful eyes of Japanese authorities, secretly left his home late last month and made his way to Lebanon, where he has taken residence. The executive’s bold move, certain to become the script for a Hollywood thriller, was illegal. That said, Ghosn insists he had no choice as he found the Japanese judicial system was “rigged” against him.

Ghosn’s story starts in 1999, when he crafted the alliance that united France’s Renault automobile group with Nissan Motors. This unlikely alliance effectively saved Nissan, while allowing Renault to tap its partner for a variety of vehicles. Later, Mitsubishi was added to the alliance, effectively forming the largest alliance of its kind in the world.

Although the two principal manufacturers benefited by working together, Ghosn was intent on bringing the companies closer together, likely through a full merger. Apparently, that move did not sit well with Nissan executives (perhaps valuing their independence), who then allegedly plotted to remove Ghosn from his position. Charges of financial impropriety were lodged against him and both companies removed Ghosn from their executive roles.

Meanwhile, Japanese authorities jailed Ghosn with the intent of convicting him of a series of crimes, which likely would have kept him Incarcerated until his death. The Japanese legal system is quite different from what we’re used to in the West, particularly in the United States, where an individual is considered innocent until proven guilty.

In Japan, an individual may stay in jail for months, if not years, until his trial is completed. Ghosn was not allowed attorney representation early on, and even then the contact was always limited. Twice he was released on bail, following arrest, the second time confined to his home in Japan under the watchful eyes of the authorities. He was also restricted from seeing his family, including his wife.

Just how Ghosn managed to leave Japan for Lebanon remains a mystery. A rumor that he was packed in a musical instrument box and shipped to Lebanon with a stop in Turkey, was one of the first stories to surface. The plot thickened when it appeared that the executive’s own family was involved, an allegation Ghosn later denied. At this point, we do not know the complete details of his whirlwind escape, but they will eventually emerge.

Beyond his uncanny escape and emergence in Lebanon, Ghosn will now fight back by settling some old scores. Expect the former executive to name names and point out misdeeds for both Nissan and Renault executives. Published reports indicate that the information he plans to share could prove devastating, especially to Nissan, which has been losing money and market share over the past few years.

Moreover, what’s also likely to be scrutinized is Japan’s legal system, which routinely jails individuals as prosecutors enjoy a conviction rate above 99 percent. That system essentially ensured conviction for Ghosn, even as he insisted upon his innocence.

Another result of Ghosn’s new-found freedom is the Renault-Nissan alliance itself – depending on what Ghosn shares — as its future may be in peril. Regardless, the fallout will be enormous as corporate and government officials wrestle with his escape and the subsequent detailing of Ghosn’s allegations.

Likely, Ghosn will support his charges with witnesses and perhaps documentation, both of which could make this story front pages news for a long time.

As for Ghosn’ future, it likely lies in Lebanon as this Middle Eastern country does not have an extradition treaty with Japan. Ghosn also has French and Brazilian passports, but they’re in the hands of his attorney in Japan. On Thursday, Interpol delivered a “red notice” to Lebanon which is “a request to law enforcement worldwide to locate and provisionally arrest a person pending extradition, surrender, or similar legal action.” It isn’t an arrest warrant, but it does mean Lebanese authorities will interview Ghosn to get his side of the story in this highly charged affair.

See Also — Top Automotive Stories of 2019

Deal Undone:
Fiat Chrysler Renault Merger

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It was a merger of equals, bringing together automakers with a strong presence in Europe and the Americas. The deal seemed to emerge from nowhere and just as quickly it died. Whatever thoughts you had about a Fiat Chrysler Renault tie-up, it isn’t going to happen. At least not in the near future.

Fiat suddenly pulled out of the deal on Wednesday, reportedly weary of the delays it ultimately pinned on the French government. Renault itself was onboard — but the company is also partially owned by the French, thus government involvement was and is an important consideration in the manner the automaker is operated.

Fiat Chrysler Automobiles

Ghosn is Gone

Apparently, the French were waiting on Nissan’s feedback, a company allied with Renault. Although not directly involved in the merger, Nissan would have a significant say in how the alliance would continue after the merger. At first, the Japanese automaker seemed indifferent to the merger, but the French were concerned that the alliance might unravel later. Further, where Carlos Ghosn once held Renault, Nissan, and Mitsubishi together, his leadership is no longer a factor. In fact, Ghosn is in legal trouble with Nissan and that dilemma extends to the Japanese government itself.

Oh, what a tangled web we weave! (When first we practise to deceive!)

Although deception isn’t listed as one of the reasons for the failed merger (with apologies to Sir Walter Scott), a lack of trust certainly was. Indeed, the post-mortem showed much weariness on Fiat’s part in getting the French government’s approval, which again, was based on Nissan’s backing. An initial delay turned into a second delay, which soon morphed into a postponement of at least five days. That last setback was too much, so FCA officially canceled the deal.

Bigland Whistleblower Lawsuit

While all this was happening, another story emerged that might have helped scuttle the deal. On Wednesday, FCA’s head of Ram truck sales, Reid Bigland, filed a whistleblower lawsuit against his employer. This stunning development comes as the federal government continues to review the automaker’s sales figures.

In particular, the SEC noted that the company reported inflated sales, which could have an impact on investors. In his lawsuit, Bigland charged that FCA pinned the blame on him and withheld most of his compensation in 2018, in part to cover fines it attributes to the executive. The executive is seeking to clear his name and regain lost compensation, reportedly in the millions of dollars.

Bigland is also the only FCA executive to sell all his shares in the automaker. That said, CEO Mike Manley sold $3.5 million in company shares immediately after the FCA-Renault merger was announced. Exactly what the sales figures and share selling have to do with the aborted merger isn’t known, although it adds an interesting wrinkle to the story.

FCA: Moving Forward

With the failed merger now in its rearview mirror, FCA will have to address the Bigland suit and settle with the federal government. It is never a good thing when a top executive files suit, especially one from one someone so influential. Bigland is also the CEO of FCA Canada.

Besides the Bigland suit, the company must continue its focus on two core brands: Jeep and Ram. Jeep has become the company’s star player, driving sales and profits to bolster the company. The automaker plans to build a new manufacturing plant in Detroit, where it will produce a pair of full-size and upscale Jeep models.

The Ram brand is also thriving and delivers its own share of the profits. The redesigned Ram 1500 recently nudged the Chevrolet Silverado out of second place among full-size pickup trucks and continues to garner a larger slice of the sales pie.

Finally, FCA will have to plan a future without another automaker, at least not with Renault. Had it merged with Renault, it would have gained access to the French brand’s electric vehicle platform, saving the company billions of dollars. As it now stands, FCA will bear that cost alone along with the added expense of developing autonomous vehicles in-house.

See Also — Fiat Chrysler Renault Merger Talk Heightens

Peugeot Prepares for its U.S. Return

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Peugeot 2008 SUV
This Peugeot 2008 SUV may someday find its way to the U.S.

French automaker Peugeot departed the U.S. market in 1991, following years of operating in relative obscurity. Indeed, the company never sold more than 20,000 vehicles annually during its time in the states, with just a fraction of that number sold in its final years.

The automaker’s parent, the PSA Groupe, has been planning its U.S. return since 2016, although it wasn’t clear whether it would market its Peugeot, DS or Citroën brands stateside. Furthermore, the company later acquired the Opel and Vauxhall brands from GM, casting a bit more uncertainty about its intentions.

Push to Pass: Bring Us a Peugeot

We now know that the Peugeot brand is PSA’s choice for leading the company back to North America. Moreover, Peugeot’s return is part of a wider Push to Pass” plan, which was outlined this week.

The global plan includes bringing Citroën to India and Opel to Russia, while enhancing DS’s international footprint. The company is seeking to increase its non-European business by 50 percent by 2021, an ambitious undertaking that won’t include U.S. and Canadian sales. Indeed, Peugeot’s North American return won’t happen before 2026, thus the company’s initial sales thrust will depend on other markets.

Don’t expect PSA to commit to building a U.S. manufacturing plant, at least not initially. The company plans to import cars from China and Europe to meet North American capacity (including Canada), according to Automotive News. PSA CEO Carlos Tavares said the North American launch will be done in a “frugal, conservative and profitable way.”

Free2Movie App
PSA’s U.S. operation already includes this Free2Move app.

There’s an App for That

PSA’s North American headquarters is based in Atlanta. Already, the company has its Free2Move app, which tracks all the shared cars, scooters, bikes, and rides in a city. The app consolidates various car- and transportation-sharing businesses to one app, making it easier for users to find what they want. At present, the app tracks Car2Go services in Portland and Seattle and adds cycling service to Washington, DC.

PSA plans to launch a whopping 116 vehicles by 2021, including concepts. The automaker wants to reduce the average age of its product range to just 3.5 years. That’s below the industry average and could give this automaker an edge in a market where consumers want the latest models.

French, But Not Renault

Peugeot’s pending return ensures a French automaker is once again represented in the U.S. market. The company’s chief rival, Renault, doesn’t have a presence either, as it exited the market a few years after selling its AMC subsidiary (including Jeep) to Chrysler in 1987. Renault’s alliance partner, Nissan, however, is well-represented in the Western Hemisphere, including in the U.S. and Canada.

DS SUV
PSA’s premium DS brand won’t be headed to North America. At least not yet.

The Peugeot 2008 SUV might be one of the first models we see from the French automaker. It is a compact model with a 2019 starting price of about $23,500. Its current competitors include the Nissan Rogue and Chevy Equinox. In the midsize utility vehicle segment is the Peugeot 5008 SUV, which costs around $35,000. Like models include the Hyundai Santa Fe XL and the Honda Pilot.

Of course, the new vehicle market may look far different than it is today, with a host of electric and autonomous vehicles dominating the segment. Peugeot also has a fleet of cars in its arsenal, including hatchbacks and sedans. The automaker also has a line of vans, ranging in size from compact to full-size. Whatever Peugeot supplies, it will give North American consumers yet another choice in a crowded sphere.

See Also — 7 Car Brands You Won’t See in the USA Anytime Soon

Photos courtesy of the PSA Groupe.

Will Renault Models Replace Fiat Chrysler Products?

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French automaker Renault may have the solution to FCA’s product needs.

If you want to buy a French-built model in the US, you probably know that Renault, Peugeot and Citroen have no presence in the market. Instead, you’ll only be able to consider the Toyota Yaris, the lone model currently built in France and exported to the US.

2015 Chrysler 200.
The current Chrysler 200 may be replaced by a competitor’s model.

Exit…Stage Right

Both Renault and Peugeot-Citroen once had a presence in the US. Indeed, Renault had controlling interest in American Motors for several years, but exited the market in 1989, two years after selling those assets to the Chrysler Corporation. In 1991, Peugeot made its own exit from the US market, ending Citroen sales too. Some twenty-five years later, few Americans under 40 can recall cars built by French manufacturers and sold in the United States.

Neither manufacturer is poised to return to the US, a market that is immensely profitable, but is also brutally competitive. Beyond domestic manufacturers such as Packard, Checker and Studebaker, a host of foreign makes have thrown in the towel too, including Isuzu, Yugo, Daihatsu, and Suzuki.

However, one of the two French manufacturers could make a return, especially if partnered with a company already present in the US. Renault’s logical partner is Nissan, as both companies own a slice of each other and are jointly led by Carlos Ghosn, the Brazilian-born CEO for the two automakers. Its a successful alliance that has produced numerous cars for the two companies since the confederacy was forged in the late 1990s.

On the other hand, Peugeot-Citroen is not so lucky. A brief partnership forged with GM in 2012 was ended less than two years later as Peugeot sought assistance from Dongfeng, a Chinese manufacturer to support its operation. Of the two French companies, Peugeot’s financial picture is the weakest.

Renault to the Rescue?

Turning back to Renault, this automaker could very well find its way back across the Atlantic, especially if Fiat Chrysler works out an agreement for the French automaker to supply it with vehicles. Indeed, FCA CEO Sergio Marchionne announced last week that his company would no longer build its compact Dodge Dart and midsize Chrysler 200 sedans, choosing instead to devote plant capacity to build more Jeeps and Ram pickup trucks. That move means FCA should become more profitable as well as more attractive to a potential suitor.

At the same time, Marchionne said it would turn to its competitors to supply these models, but the likelihood that a Ford, Toyota or a Hyundai would dilute their own model lines to accommodate FCA seems very unlikely.

Renault may be the most logical supplier for FCA as it has two models — the midsize Latitude and the compact Mégane — that might possibly be rebadged and sold in the US. Both models are underpinned by platforms shared with current Nissan products (Altima and Sentra), but otherwise the cars are all Renault.

The downside in choosing the Mégane is that it isn’t a sedan — Renault builds hatchback, coupe and wagon variants, but no four-door sedan. That said, the hatchback might be a fit for a market that is finally accepting this body style again. Currently, Renault builds the Mégane at four plants scattered across Europe and might be in a position to supply the next generation Dodge Dart.

The second model is the Renault Latitude and this one is already sold in Mexico, where it is known as the Renault Safrane. Interestingly, the Renault Latitude/Safrane is built in Korea by Renault Samsung Motors, a minor car manufacturer operating in a market dominated by Hyundai and Kia.

Busan Plant Capacity

Although the Korean company has built more than 2.4 million cars since its 2000 introduction, its Busan manufacturing plant has the capacity to build 300,000 vehicles annually. Supplying the Latitude as the Chrysler 200 in the US and Canada would keep the Busan factory humming and give Chrysler a much-needed product.

Will Renault respond if Marchionne comes calling? There is a good chance that they would. In 2013, Mitsubishi sought a similar tie up with Renault to supply it with a midsize sedan for the US market, but that deal collapsed. In any case, Mitsubishi is barely hanging on in a market where demand for Renault-supplied vehicles would be much smaller than that of a network composed of Dodge and Chrysler dealers.

At the same time, any Fiat Chrysler and Renault relationship could push out further, perhaps including Nissan and forming at least one kind of a business relationship Marchionne desires.

These are interesting times in the auto industry. Then again, the industry is always fascinating.