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Scandal of absent Ghosn hangs over Nissan at Tokyo auto show

AP  |  Tokyo 

Overshadowing the futuristic technology on display at this year's Tokyo Motor Show is the downfall of Nissan's former Chairman Carlos Ghosn.

Since Ghosn's arrest for alleged financial misconduct in November 2018, Nissan has sunk into deep losses and its global vehicle sales have tumbled.

At a presentation to reporters Wednesday, two senior Nissan executives talked up electric vehicles featured at Nissan Motor Co.'s booth.

The show gives automakers a chance to showcase some of the industry's upcoming mobility technology, including ecological fuel cells and personal transport devices that look like scooters.

Ghosn, who says he is innocent, spearheaded such innovations during his two decades at Nissan's helm.

The company's newly named CEO, Makoto Uchida, and his predecessor Hiroto Saikawa, who resigned last month over his own financial scandals, did not make appearances at the media presentation.

Instead two senior executives, in charge of research and of design, introduced two concept model electric vehicles. One was a sport-utility and the other a tiny car, known as "kei" in Japan, that they said would become commercial products soon.

Nissan pioneered electric vehicles, leading the industry with its Leaf sedan, said Kunio Nakaguro, executive vice president in charge of research and development. Nissan has sold 430,000 Leafs.

Running on a loop on huge screens at Nissan's booth was was a video of tennis superstar Naomi Osaka, who has signed to promote Nissan.

"Exactly a year ago, an upset of the century," it said, referring to Osaka's Grand Slam win.

On the minds of those watching was the year of upsets at Nissan, which has appeared rudderless at times after Ghosn's departure.

Ghosn was released on bail after a dramatic months' long struggle with prosecutors who insisted he should stay in detention.

He is awaiting trial, likely not until next year, for allegedly falsifying financial documents to hide future compensation and for breach of trust for making dubious payments to businessmen for personal gain, according to Tokyo prosecutors.

In statements and comments on videotape, Ghosn has insisted that other Nissan executives plotted against him out of fears the company might lose some of its autonomy in a merger fears among some at Nissan of a fuller merger with its French alliance partner Renault SA.

Even before Ghosn's arrest, the company was grappling with scandals over quality control that have plagued many automakers in Japan.

Nissan's reshuffling of its top leadership and measures to strengthen its governance should have come earlier, analysts say.

Such serious problems send negative signals to managers and employees throughout a company, and enable cover-ups that result in poorer quality products, undermining profits in a competitive market, said Cindy Schipani, a professor of business law and governance expert at the University of Michigan.

"The bottom line is that corporate governance requires leadership with integrity. Otherwise, they could send the company into a downward spiral," Schipani said.

Nissan announced earlier this year that it's slashing 12,500 jobs, or about 9% of its global workforce, to cut costs and achieve a turnaround amid tumbling profits.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, October 23 2019. 11:50 IST
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