Carlos Ghosn, luca de meo

Renault reports loss, joins Nissan in major cost-cutting post-Ghosn

PARIS — Renault’s first loss in a decade triggered a no-taboos commitment on Friday to cut costs by 2 billion euros ($2.2 billion) over the next three years as the automaker tries to put the Carlos Ghosn affair behind it.

As ex-Volkswagen brand manager Luca de Meo prepares to take over as chief executive of the French automaker, which has been rocked by the Ghosn scandal, it did not exclude job cuts in a promised review of its performance across all factories.

Like many auto industry rivals, including its alliance partner Nissan, Renault is grappling with tumbling demand in key markets like China, and said it expects the sector to be hit further this year, including in Europe. Nissan this week had its first quarterly loss in nearly 10 years and cut its operating profit forecast.

In a reflection of this sobering assessment of the market outlook, Renault set a lower operating margin target of between 3% and 4% for 2020, down from 4.8% in 2019, and cut its proposed dividend against 2019 by almost 70% from a year earlier.

While Renault faces high investment costs to produce cleaner car models and supply chain problems due to China’s coronavirus outbreak, a major challenge remains moving on from the scandal involving former boss-turned fugitive Ghosn, which strained its relations with Nissan and paralyzed joint projects.

“It has been a tough year for Groupe Renault and the alliance,” acting Chief Executive Clotilde Delbos said on a conference call, adding that the broader autos downturn had hit the company “right when we were facing internal difficulties.”

Renault could not afford to wait for De Meo’s arrival in July to attack costs, Delbos said, adding that nothing would be “taboo” as it reviews its business.

Meatier goals would be made public in May, she said, alongside joint plans with Nissan, as executives repeated assurances that the alliance was on track.

Delbos also stressed that Renault’s automotive operational free cash flow, under scrutiny from analysts, would be positive in 2020 after stripping out restructuring costs.

“We’re very confident that there is no topic on cash availability within the group,” Delbos said.

Renault shares recovered from falls in early trading, and were up 1.8% at 1200 GMT despite it posting a loss of 141 million euros ($153 million) for the group share of net income.

This followed charges linked to some of its Chinese joint ventures, where it said performance needed to improve, while the contribution from Nissan, in which Renault has a 43% stake, also fell and it was hit by a French deferred tax charge.

Ghosn, who ran Renault and oversaw its alliance with Nissan, was arrested in Japan in late 2018 on financial misconduct charges, but fled to Lebanon in December.

He has denied wrongdoing and hit out at his past employers, saying the Renault-Nissan alliance was all but dead without him.

De Meo, who used to run Seat, is taking over from Delbos, who is also Renault’s financial chief and who stepped temporarily into the CEO role after Thierry Bollore, a long-standing Ghosn ally, was ousted in October.

Renault forecast that the global auto market would fall in 2020, with sales in Europe and Russia down around 3%, after it was penalized by its performance in the likes of Argentina and Turkey in 2019 and its withdrawal from Iran continued to weigh.

The group has a factory in Wuhan, the epicenter of the coronavirus epidemic, which has been in lockdown, and the firm said other plants might come on and off in the coming weeks due to supply chain interruptions.

Renault’s group sales fell 3.3% to 55.53 billion euros in 2019, down 2.7% at constant exchange rates, and it forecast these would be flat in 2020.

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Carlos Ghosn

Ghosn says French ambassador informed him of Nissan plot against him

BEIRUT — Former Nissan chairman Carlos Ghosn said on Tuesday that the French ambassador had warned him shortly after his arrest that his own company was plotting against him.

“Frankly, I was shocked by the arrest, and the first thing I asked is make sure Nissan knows so they can send me a lawyer,” Ghosn told Reuters in an interview in Beirut.

“And the second day, 24 hours from this, I received a visit from the French ambassador who told me: ‘Nissan is turning against you’. And this is where I realized that the whole thing was a plot.”

Former Nissan CEO Hiroto Saikawa, who was forced to resign last year after admitting that he had received improper compensation, told a news conference shortly after Ghosn’s arrest that Ghosn had been using corporate money for personal purposes and under-reporting his income for years.

The arrest of Ghosn, widely respected for rescuing the carmaker from near-bankruptcy, has put Japan’s criminal justice system under international scrutiny.

Among the practices now under the spotlight are keeping suspects in detention for long periods and excluding defense lawyers from interrogations, which can last eight hours a day.

“When he told me that ‘two hours or three hours later, after your arrest, Saikawa went in a press conference and made his infamous statement where he said, you know, ‘I am horrified, but what I’m learning…” — so when he told me he made these statements, I said ‘Oh my God this is a plot’.”

 

 

Ghosn, 65, fled Japan last month while awaiting trial on charges of under-reporting earnings, breach of trust and misappropriation of company funds, all of which he denies.

The one-time titan of the car industry said the alternative to fleeing would have been to spend the rest of his life languishing in Japan without a fair trial. Ghosn said he had escaped to his childhood home of Lebanon in order to clear his name. He noted that there were conflicting stories about his astonishing escape, but declined to say how he had managed to flee.

Tokyo prosecutors said his allegations of a conspiracy were false and that he had failed to justify his acts. The 14-month saga has shaken the global auto industry and jeopardized the Renault-Nissan alliance, of which Ghosn was the mastermind.

Japan’s Ministry of Justice has said it will try to find a way to bring Ghosn back from Lebanon, even the countries have no extradition treaty.

Ghosn said the Japanese authorities were intent on preventing him from having a just trial.

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Carlos Ghosn

Carlos Ghosn undergoes questioning by Lebanese prosecutor

BEIRUT/TOKYO — Carlos Ghosn’s lawyer said he was “very comfortable” with legal proceedings in Lebanon on Thursday, after the fugitive ex-Nissan boss was questioned over an extradition request from Japan where he faces criminal charges.

Ghosn fled Japan to Lebanon, his childhood home, last month as he awaited trial on charges of under-reporting earnings, breach of trust and misappropriation of company funds, all of which he denies.

His dramatic escape has raised tension between Tokyo and Beirut at a time when Lebanon is seeking an international bailout to help it tackle a deep financial crisis.

Ghosn slammed the Japanese justice system at a two-hour news conference on Wednesday, prompting Japan’s justice minister to launch a rare and forceful public response.

After questioning in Beirut about Japan’s Interpol wanted notice, two judicial sources said the prosecutor had imposed a travel ban, a step Carlos Abou Jaoude, a Beirut-based lawyer for Ghosn, described as procedural to broadcaster Al Jadeed.

Lebanon has no extradition agreement with Japan.

“He (Ghosn) is very comfortable with the path,” Jaoude told another broadcaster, MTV, adding that Ghosn was also comfortable in himself “especially after what he went through.”

 

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One of the judicial sources said authorities had asked Japan for its file on Ghosn, including the charges against him, and would not question him again until the information is received. Ghosn would surrender his French passport on Thursday, he said.

Ghosn said later he was more comfortable with the Lebanese judiciary than that of Japan. “I will fully cooperate,” he told broadcaster LBCI.

Japan’s Justice Minister Masako Mori said Ghosn’s allegations that he had had “zero chance” of a fair trial in Japan were unfounded.

“Defendant Ghosn was looking to justify his unlawful exit from Japan by propagating a false recognition of our justice system,” she said at the second of two news conferences, the first of which was held shortly after midnight.

“I felt that we needed to respond immediately to broadcast a correct understanding to people around the world.”

Ghosn told LBCI her comments were “ridiculous.”

“Today my concern is clearing my name and reputation because all the accusations against me are fabricated,” he told Al Jadeed.

Trial in Lebanon?

Ghosn’s arrest after his private jet touched down in Tokyo in November 2018 shook the global auto industry and jeopardized the Renault-Nissan alliance of which he was the mastermind.

The Brazilian-born executive said on Wednesday he was prepared to stand trial anywhere he could get a fair hearing but also that he was ready to stay for a long time in Lebanon.

A source close to the 65-year-old has said his legal team is pushing for him to be tried in the country.

Ghosn said, however, that he did not want to put pressure on Japan-Lebanon bilateral ties, two days after Japan’s ambassador to Lebanon requested greater cooperation from President Michel Aoun in dealing with the case.

The decision by Lebanon’s prosecutor, Judge Ghassan Ouiedat, after Ghosn’s questioning at Beirut’s Justice Palace requires Ghosn to keep the authorities informed of his place of residence, the judicial sources said.

Ghosn was given the same instruction after accompanying questioning over a formal legal complaint filed by a group of Lebanese lawyers who accuse him of “normalization” with Israel over a visit he made there in 2008.

Ghosn said on Wednesday he had made the trip as a French citizen and an executive of Renault to sign a contract with a state-backed Israeli firm to sell electric vehicles, and had been obliged to go because the board had requested it.

He said he had apologized for the trip and had not meant to hurt the people of Lebanon, which deems Israel an enemy state.

During the visit, Ghosn met Ehud Olmert, who was Israel’s prime minister at the time of the 2006 war between Israel and the Iranian-backed Lebanese group Hezbollah.

Nearly 1,200 Lebanese, mostly civilians, died in the 2006 war and 158 people died in Israel, mostly soldiers.

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Carlos Ghosn

Ghosn blames France’s Macron for planting the seeds of his arrest

PARIS — Ex-Nissan boss Carlos Ghosn said on Wednesday that a surprise corporate move, orchestrated five years ago by French President Emmanuel Macron, who was then economy minister, soured relations between Renault and Nissan and contributed to his ouster.

Ghosn, the former head of the car alliance, said Nissan executives and Japanese officials were shocked by a 2015 decision by the French government to increase its voting rights at Renault.

“This left a big bitterness. Not only with the management of Nissan, but also the government of Japan,” Ghosn told reporters, although he did not name Macron. “And this is where the problem started.”

Macron’s office did not respond to a request for comment.

In April 2015, as a 37-year-old minister with then-unknown presidential ambitions, Macron ordered a surprise increase in the state’s stake in Renault designed to secure double voting rights.

The overnight move gave the French state a blocking minority in Renault, which in turn controlled Nissan via its 43.4 percent stake in the Japanese firm.

According to French and Japanese sources, that rattled the Japanese side of the Renault-Nissan alliance, which feared a national champion was falling under the control of the French government.

In the ensuing eight-month boardroom fight between Macron’s ministry and Hiroto Saikawa — Nissan’s second-in-command at the time — Ghosn sees the seeds of what he says grew into a conspiracy to have him arrested and oust him from control of Nissan.

The 65-year-old fled Japan last month as he awaited trial on charges of under-reporting earnings, breach of trust and misappropriation of company funds, all of which he denies.

He is now in Lebanon, where he spoke to international media on Wednesday.

“There started to be some kind of defiance from our Japanese colleagues, not only about the alliance but also about me,” Ghosn told reporters.

“And some of our Japanese friends thought: The only way to get rid of the influence of Renault on Nissan is to get rid of him,” he added. “Unfortunately, they were right.”

Following Ghosn’s arrest in November 2018, Nissan executives said that said governance had been eroded by Renault’s control. Saikawa subsequently contested Renault’s right to appoint executives and directors under the alliance master agreement, in correspondence seen by Reuters. 

“President Macron himself has skin in the game,” Max Warburton, an analyst with New York-based asset manager AllianceBernstein, told Reuters in the weeks following Ghosn’s arrest. “He must recognize that his decision in 2015 to increase the French state’s holding in Renault … likely impacted Japanese perceptions of the alliance and heightened concerns that Nissan was ultimately within the control of the French government.”

Ghosn said Wednesday that, partly because of the mistrust caused by the 2015 row, he had doubts about the future of the alliance.

Asked if he felt let down by the French government’s muted response to his arrest, Ghosn replied: “How would you have felt in my place? Supported? Defended? Let down? I don’t know. I won’t state a view for now.

“I am a French citizen like any other. I’m not asking to be treated better than anyone else, but I shouldn’t be treated less well than others either.

“When the French president says ‘presumed innocent’, I believe him. But when French officials say ‘presumed innocent’ and have a body language that says ‘he is guilty’, I don’t agree with that,” Ghosn said.

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Carlos Ghosn

Carlos Ghosn leaves Japan for Lebanon


PARIS — Carlos Ghosn, the ousted boss of the Renault-Nissan carmaking alliance who was awaiting trial in Japan, flew into Lebanon on Monday evening, France’s Les Echos newspaper reported.

The newspaper cited its own unnamed source and a report in Lebanese newspaper L’Orient-Le Jour. There was no immediate confirmation from official sources.

It was unclear how Ghosn, who holds both French and Lebanese citizenship, would have been able to leave Japan, where he has been under strict court-imposed restrictions on his movements. As Financial Times reports, it’s unclear whether Ghosn has struck a deal for his release, or if he somehow escaped house arrest.

Ghosn was arrested shortly after his private jet touched down at a Tokyo airport on Nov. 19, 2018. He faces four charges — which he denies — including hiding income and enriching himself through payments to dealerships in the Middle East.

Nissan sacked Ghosn, saying its internal investigations revealed misconduct ranging from understating his salary while he was its chief executive, and transferring $5 million of Nissan funds to an account in which he had an interest.

Ghosn’s lawyers have asked a court to dismiss all charges against him. They accuse prosecutors of colluding with government officials and Nissan executives to oust him to block any takeover of the automaker by French alliance partner Renault, of which Ghosn was also chairman.

After his arrest, Ghosn spent a long period in detention, but more recently was allowed out, subject to stringent bail conditions, which required him to stay in Japan.

Reporting by Christian Lowe and Nicolas Delame.

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