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The Rise and Fall of Carlos Ghosn

Source | | By| Doron Levin



Why business mergers fail is a topic of endless study. And the $5 billion rescue of Nissan by French automaker Renault in 1999 looked like one more folly in the making, what skeptics at the time analogized as “tying two rocks together to make them oat.”

In this case, the skeptics were mistaken. The Renault Nissan Alliance has proven itself to be a vibrant, stable, competitive, and pro table global mobility business—neck and neck with Volkswagen Group to be the largest automaker on the planet by number of cars sold. But now the future of Renault Nissan (with Russian automaker AvtoVAZ and Mitsubishi Motors added to the alliance) is suddenly in doubt, owing to the incarceration

in Japan of the alliance’s architect and theoretician, chairman, and chief executive:Carlos Ghosn. Since his arrest on Nov. 19, the 64-year-old occupies a small cell in Tokyo where he is fed rice three times a day, indicted on charges of underreporting his income from Nissan to Japanese authorities.

Whether the charges have merit is not yet known, though Japanese prosecutors have a conviction rate that exceeds 99%— one of the highest in the G20. But the fallout has already been felt in the alliance and across the wider automotive industry. Within a week of Ghosn’s arrest, the boards of Nissan and Mitsubishi voted to strip him of his chairmanship. As this issue went to press, he remained CEO and chairman of Renault.

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