Inside Carlos Ghosn’s epic fall from superstar auto executive to international fugitive
- As recently as 2017, Carlos Ghosn, the automotive executive leading a triple alliance of companies, was raking in tens of millions of dollars in compensation and had homes on multiple continents.
- Today he’s an international fugitive, having skirted Japanese authorities in an escape that’s captured the world’s attention.
- The 65-year-old is assumed to be in Beirut, where he holds citizenship and can avoid extradition to Japan, where he faces multiple charges of financial malfeasance.
- Through press reports spanning Ghosn’s 14 months of drama, Business Insider has pieced together a comprehensive account of the industry superstar’s epic rise — and messy fall.
- Click here for more BI Prime stories.
In 2018, Carlos Ghosn was one of the most powerful automotive executives in the world.
As chief of the Renault-Nissan-Mitsubishi Alliance, the Brazilian-born and French-educated businessman oversaw vehicle sales totaling more than $243 billion in revenues worldwide by 2018. Along the way, he earned nicknames like “le cost killer” and “the Ice Breaker” for helping turn around failing automotive businesses.
But by Tuesday, the 65-year-old was no longer a cosmopolitan boss but rather an international fugitive, having somehow slipped out of house arrest in Japan while awaiting trial for charges of financial misconduct and personal use of company assets. He has categorically denied all allegations since his first arrest in November 2018.
Theories of how Ghosn apparently hoodwinked authorities swirled after he confirmed a safe arrival in Lebanon, which has no extradition treaty with Japan, making the continuation of his trial difficult, if not impossible. MTV, a Lebanese television channel, reported Ghosn may have hidden inside a musical-instrument carrying case brought by a band playing at his Tokyo home for a holiday party. The station did not cite any sources for the instrument-case escape theory.
Other accounts said Ghosn, who held multiple international passports, may have evaded authorities by using forged papers and a false identity at a smaller under-the-radar airport. One Beirut official said Ghosn entered the country with a French passport, The New York Times reported.
Regardless of his methods, Ghosn’s international escapade is yet another wrinkle in a saga likely to define three decades of intense competition and dealmaking in the auto industry — a trend that began when electric vehicles were still largely a pipe dream and scandals like Dieselgate would be hard to imagine.
The turnaround artist earns his chops
After graduating from France’s most elite engineering programs, a younger Ghosn joined the French tire maker Michelin. There, he worked his way up through plant-manager roles and research-leadership roles, eventually being tasked with repairing the company’s South American operations and restructuring the North American division after an acquisition, according to a 2003 Time magazine profile.
His reputation eventually landed him a job as CEO of Renault when the French automaker was privatized in 1996.
“Within two years, Renault had recovered with record profits,” researchers at Coventry University’s center for Sustainable Regeneration, wrote in 2004. Cost savings from production streamlining and the introduction of a third manufacturing shift helped the automaker shore up enough profits to buy a 37% stake in Nissan just before the end of the decade.
After the deal was signed, Nissan’s gross margins grew quickly, peaking at more than 10% in the 2000s before the global financial crisis gutted automotive businesses. Even as the world’s economy struggled to rebound, Nissan’s profits quickly returned to the black.
The alliance of Nissan and Renault would flourish into the 2010s, with Ghosn’s pay increasing the entire time. In 2014, Ghosn was taking home more than $15 million in his annual salary from both automakers and a bonus from Renault.
Compared with other auto executives, Ghosn’s pay was astronomical. The superstar executive’s income — or at least, what’s available, given authorities’ accusations of massive underreporting — shows he outearned all but General Motors’ Mary Barra in recent years, with her stock options helping her slightly edge out Ghosn.
Jetting between the two companies’ headquarters on different continents meant he was racking up miles on Nissan’s corporate jet too. The company in 2016 bought a Gulfstream G650 — one of the most popular and opulent private jets — to replace an aging Gulfstream model. G650 jets can sleep up to 10 people and easily cost upward of $67 million.
Throughout 2016, according to The Wall Street Journal, the jet made stops at more than 35 different airports on more than 80 travel days that year. It also departed Beirut eight times in the seven weeks before his November arrest, The Journal reported, citing flight records.
Among other corporate amenities Japanese prosecutors likely think Ghosn misused for personal gain include an €8,000-per-month apartment in Amsterdam leased exclusively for the executive. Bloomberg reported in 2018 Nissan also leased properties in Brazil, France, Beirut, and Tokyo.
By 2016, the alliance was so successful that it easily acquired a 34% stake in Mitsubishi after the automaker was hit by several scandals.
Nine million vehicles. Four common platforms. Six years.
That’s the audacious plan set out by Ghosn in 2017, heralding a “new milestone” for the three-company alliance as it also welcomed a new logo for a new era.
“Our total annual sales are forecast to exceed 14 million units, generating revenues expected at $240 billion by the end of the plan,” Ghosn said at the time.
There’s still time for the alliance to hit the goals, but the likelihood of its success was thrust into chaos in November 2018, when Ghosn was arrested as he tried to depart on the company jet in Tokyo alongside Nissan Director Greg Kelly.
For more than a year since the initial arrest, Ghosn had been in Japan, either in custody or on house arrest, until this week’s escape. After a 3 1/2 month stay in a Japanese jail — with limited access to the outside world, 30 minutes of exercise daily, and only two baths a week — Ghosn and his legal team worked out a bail deal with prosecutors.
The $9 million bail conditions stipulated that Ghosn’s legal team retain his three passports, and prosecutors also requested he have minimal contact with his wife for fear the duo could plot to tamper with evidence and witnesses or escape.
Even Ghosn’s lawyer Junichiro Hironaka is unsure how he pulled it off, he told reporters.
“It would have been difficult for him to do this without the assistance of some large organization,” Hironaka said, according a New York Times report. “I want to ask him, ‘How could he do this to us?'” Ghosn even apparently left all his things in Japan, the lawyer added.
What happens next? That’s anyone’s guess.
In a brief statement on Monday, while most Japanese government and business offices were closed for New Year’s, Ghosn said he was fleeing persecution and what he called a “rigged” justice system.
“I am now in Lebanon and will no longer be held hostage by a rigged Japanese justice system where guilt is presumed, discrimination is rampant, and basic human rights are denied, in flagrant disregard of Japan’s legal obligations under international law and treaties it is bound to uphold,” Ghosn said through a spokesperson.
“I have not fled justice — I have escaped injustice and political persecution,” the statement said. “I can now finally communicate freely with the media, and look forward to starting next week.”
Ghosn is expected to make a more formal appearance next week from Lebanon, a country that has largely embraced both Ghosn the superstar and Ghosn the fugitive.
“We are all Carlos Ghosn,” a billboard in Beirut said in December 2018.
But on Twitter, as speculative theories swirled, one asked: Will the same postage stamp that bore Ghosn’s likeness in 2003 also show him in an inmate’s jumpsuit?
That’s something we’ll all have to wait and learn. Japanese authorities, meanwhile, will have plenty of questions to answer after the holiday.
Additional reporting by Matthew DeBord, Benjamin Zhang, Taylor Nicole Rogers, Callum Burroughs, and Meira Gebel.