Arrested Carlos Ghosn Not To Be Immediately Replaced By Carmakers’ Alliance

Appointment of no interim chairman to replace the disgraced Carlos Ghosn would be done by Renault, Nissan and Mitsubishi Motors to head the three company alliance after Ghosn was arrested in Japan over allegations of financial irregularities.

Al the three companies are in an alliance that is the second largest car maker of the world combined.

According to the plan of envisioned by the three companies so far, the alliance would implement a system where the head of the three companies would jointly lead the group instead of just one person heading the alliance like Ghosn did, said Osamu Masuko, chief executive of Mitsubishi Motors, while speaking to reporters in Tokyo.

He also confirmed that there were no discussions of any alteration to the alliance’s current capital structure when the executives of the three companies had met in Amsterdam earlier in the week and after the arrest of Ghosn. .

However, some analysts believe that it is just a matter of time that there would likely be a change in the governance structure of the alliance. Ghosn was arrested on November 19 following allegations by Nissan of him underreporting his personal income to regulators in Tokyo. Ghosn was the key in forging the three company alliance and was the chairman of the boards of all of the three auto manufacturers.

There are reports in Japan that Japanese prosecutors are planning to seek an extension of custody for Ghosn for another 10 days. But after that the prosecutors would be required to file a criminal charge sheet in the court against Ghosn, according to a report by Japan’s Kyodo news agency on Thursday.

But there are concerns arising about the future of the alliance following the arrest of Ghosn. While Ghosn was swiftly removed from the position of chairman by both the Japanese car makers Nissan and Mitsubishi following the arrest, Renault did not tread the same path but rather chose to retain him as the chairman and chief executive of the company. He is still the head of the car alliance.

A meeting, which was scheduled even before Ghosn’s arrest, for review of the operations of the alliance in Amsterdam, was attended to be the leaders of the three companies except Ghosn. Some executives attended via teleconference.

It is believed that the meeting focused on the operational issues of the alliance because the three companies share research and development, basic components, and some technology.

A separate meeting of the board of Renault-Nissan BV, which runs the alliance, would be required to oust Ghosn.

They “have all – individually and collectively – emphatically reiterated their strong commitment to the alliance”, said the three companies in a joint statement.

The statement added: “The alliance has achieved unparalleled success in the past two decades. We remain fully committed to the alliance.”

In recent year, larger portions of profits for the alliance is has been accounted from by Nissan and according to some analysts, this could be the basis for a change in the otherwise disbalanced and unusual cross-ownership.

(Adapted from TheGuardian.com)

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