Chronicling the 'Ghosn shock'

Collision Course: Carlos Ghosn and the Culture Wars That Upended an Auto Empire

Author: Hans Greimel & William Sposato

Publisher: Harvard Business Review Press

Price: Rs 1,499

Unlike the umpteen times he had flown to Tokyo, straddling time zones and fighting jet lag, the flight Carlos Ghosn boarded on November 19, 2018, turned out to be starkly different.
 

Even before he could clear immigration, he was taken into custody and locked up in a cell at the Tokyo Detention House. “I didn’t even understand what was going on… You don’t know the reason for which you are arrested. I thought I had landed in North Korea not in Japan,” the storied chief executive said in an interview.

If he never saw it coming, neither did most others, except the prosecutors and those who cooperated with the probe. It was truly, the “Ghosn Shock”, as the Japanese media soon termed it, and it reverberated beyond the man in question and his family, and almost equally to the organisations he helmed, the countries involved, the auto industry, and the global business community. Soon, as Hans Greimel and William Sposato tell us in this gripping tale, the deceptive calm broke and latent tensions came to the fore.

The authors trace the saga to its exciting start in 1999 — when Renault’s Brazil-born top executive was brought in to salvage a tottering Nissan. Mr Ghosn, who is of Lebanese origin and also holds French citizenship, navigated the Japanese business world boldly — cutting costs, dismantling the keiretsu system of corporate tie-ups, and challenging the seniority-based promotion system. He went on to forge the Renault-Nissan-Mitsubishi “alliance” that came to be feted as a new model in cross-culture business cooperation. It was a precarious balance, to say the least, but Mr Ghosn deftly managed to hold it all together. He prided himself on the Nissan turnaround he engineered and even wrote a book on it. But this spectacular success seemed to have created a sense of entitlement that ultimately led to his downfall.

Two decades. Three continents. Multiple players. Putting together such an expansive and crowded narrative is a stupendous task, especially given that the story has almost all the trappings of an epic — a charismatic protagonist, the dramatic character “flaw”, infighting, intrigue, and the final fall from grace. It is all the more challenging to place it in the right context. The duo accomplishes this with aplomb, leveraging their experience as journalists that know Japan inside out. Mr Sposato has spent more than two decades writing about Japan Inc., its economy, and financial markets. Mr Greimel has been following the Japanese car industry for almost 15 years. He had direct access to Mr Ghosn during the writing of  Collision Course. Many of the quotes are drawn from those conversations and other interactions he had with Mr Ghosn in the course of reporting for Automotive News. This deep insider knowledge is the book’s biggest strength: Of the country’s social, cultural, and political milieu, its economic history, national priorities, and its legal system. It is against this larger canvas that Mr Ghosn’s story emerges.

With financial misconduct and breach of trust charges against him, Mr Ghosn faced up to 15 years in prison, if convicted. The prosecutor’s office believed that he took what he felt he deserved privately when he could not get paid what he wanted publicly. But Mr Ghosn saw himself as the victim of a sinister plot by a few Nissan executives and a Japanese government that loathed the “irreversible” integration of Nissan and Renault. Mr Sposato and Mr Greimel present these opposing views with great clarity and balance. They meticulously follow every lead to create a wholesome narrative that also raises questions about justice and jail “Japan style”.

Mr Ghosn’s arrest left the Alliance wobbly, with a dip in sales and profits all across the two organisations. Not just this. A series of collisions followed, between different players at different levels. Companies, people, cultures, nations, governments, and legal systems were caught in the vortex. When there are too many strands and layers such as this, narratives often get tardy and convoluted. But the authors steer clear of this, blending factual accuracy with remarkable fluency.

For many in Japan, Mr Ghosn’s stunning escape in December 2019—in an audio equipment case—to his ancestral homeland of Lebanon is enough proof of his guilt. But he remains defiant, continuing his fight against “trumped-up charges” and striving hard to rebuild his reputation (two books and a planned documentary being part of the effort).

Without a trial, as the authors say, the Ghosn question may remain a “he-said, she-said deadlock”. But one thing is clear. With all imperfections on his head, he is a living corporate legend for many — the first person to serve simultaneously as CEO of two Fortune 500 companies, one who broke new ground in transnational business cooperation, and someone, as an outsider, had “the will and the ability to tear down barriers no Japanese executive could or would”.

Collision Course is a brilliant capture of the interplay of various forces that led to the celebrated CEO’s downfall and its ripple effect. Beyond this, it is an illuminating case study on business alliance, corporate governance, culture crossing, role of governments in business and, not least, ethics.