{"id":133673,"date":"2019-02-12T11:52:38","date_gmt":"2019-02-12T16:52:38","guid":{"rendered":"http:\/\/www.thedetroitbureau.com\/?p=133673"},"modified":"2019-02-12T12:08:38","modified_gmt":"2019-02-12T17:08:38","slug":"ghosn-affair-hits-nissans-bottom-line-along-with-weak-sales","status":"publish","type":"post","link":"https:\/\/thedetroitbureau.com\/2019\/02\/ghosn-affair-hits-nissans-bottom-line-along-with-weak-sales\/","title":{"rendered":"Ghosn Affair Hits Nissan\u2019s Bottom Line, Along with Weak Sales"},"content":{"rendered":"
\"\"<\/a>
Nissan is taking an $83.2 million charge against earnings due to the scandal surrounding Carlos Ghosn.<\/figcaption><\/figure>\n

Nissan Motor Co. warned that its earnings for the fiscal year ending March 31, could be about the lowest the carmaker has seen in six years.<\/p>\n

Nissan now expects to earn 410 billion yen, or $3.7 billion, for the fiscal year, a 45% year-over-year decline. It originally projected a 500 billion yen, or $4.5 billion profit.<\/p>\n

\"\"<\/a>
Global News!<\/figcaption><\/figure>\n

The second-largest of the Japanese automakers put most of the blame on sliding sales in the U.S. and China, its two largest markets. But it also revealed that it has logged an $83.2 million charge related to the scandal that began with the arrest last November of its former Chairman Carlos Ghosn.<\/p>\n

The Ghosn affair has raised numerous concerns about the future of the Renault-Nissan Mitsubishi Alliance that the 64-year-old executive had helped craft during the past two decades. Jean-Dominique Senard, the new chairman of the French automaker, will visit Japan later this week for a series of meetings with Nissan CEO Hiroto Saikawa and other executives.<\/p>\n

(Ghosn reimbursing Renault for 50,000 euros in wedding expenses. <\/em>Click Here<\/a><\/span>\u00a0for the story.)<\/em><\/strong><\/p>\n

Following Ghosn\u2019s Nov. 19 arrest, both Nissan and smaller Japanese automaker Mitsubishi quickly moved to fire him. But even though the Brazilian-born executive has been held in solitary conferment at the Tokyo Detention Center, he remained on the Renault payroll until Jan. 24, when he agreed to resign.<\/p>\n

\"\"<\/a>
Nissan CEO Hiroto Saikawa told the media recently that Nissan and Renault officials are trying to build "trust."<\/figcaption><\/figure>\n

Senard had been running French tiremaker Michelin when tapped to take over as Nissan chairman last month. Thierry Bollore, a long-time lieutenant of Ghosn\u2019s was named Renault\u2019s new CEO.<\/p>\n

Ghosn\u2019s arrest followed an internal investigation at Nissan that discovered alleged financial corruption by the former executive and his colleague Greg Kelly. Kelly was released on bail on Christmas Day, but prosecutors in Tokyo have successfully argued that Ghosn would pose a flight risk and potentially try to tamper with evidence, the courts repeatedly declining his request for bail.<\/p>\n

The case has generated widespread skepticism, critics questioning whether the case was based more on Nissan\u2019s desire to reshape its relationship with Renault than on any real evidence of corruption on Ghosn\u2019s part.<\/p>\n

Though substantially smaller than its Japanese partner, Renault holds a 43.5% stake in Nissan which, in turn, holds just 15% of the French carmaker\u2019s equity. That has allowed Renault to unilaterally appoint board members and other senior executives, something Saikawa is believed to be seeking to change.<\/p>\n

There have been several high-level meetings between the European and Asian partners, but Senard\u2019s trip this week will mark the first time discussions have taken place in Japan.<\/p>\n

\u201cWe want to build mutual trust and good communications,\u201d Nissan CEO Saikawa said during a media briefing at Nissan headquarters in Yokohama on Monday.<\/p>\n

(<\/em>Click Here<\/a><\/span>\u00a0to see how \u201cplot and treason\u201d brought Ghosn down, jailed exec says.<\/em><\/strong>)<\/em><\/strong><\/p>\n

Ghosn\u2019s arrest ended what many insiders have described as an iron-fisted rule over all three of the alliance\u2019s members. It also appears to put at least a temporary halt to a push by Ghosn \u2013 and backed by the French government \u2013 to more completely merge Renault and Nissan.<\/p>\n

\"\"<\/a>
New Renault Chairman Jean-Dominique Senard, left, traveled to Japan to meet with his counterparts at Nissan.<\/figcaption><\/figure>\n

\u201cIn the past few years there\u2019s been a lot of talk about \u2018convergence\u2019 of the two companies\u2019 operations,\u201d Saikawa said Monday. \u201cWhile stabilizing our operations, we need to re-examine whether investments (towards such a convergence) are the most efficient.\u201d<\/p>\n

But while Saikawa has staked out a more autonomous relationship since Ghosn\u2019s arrest, industry observers expect him to try to lay out a new approach that could continue to have Renault and Nissan, as well as Mitsubishi, work together.<\/p>\n

The Nissan CEO\u2019s tenure is expected to be short. He last month announced plans to step aside, though Saikawa did not lay out a timeline and it is unclear how far a search for his successor has so far gone.<\/p>\n

The Ghosn scandal continues to weigh heavily on all three partners in the alliance at a time when they are facing a variety of problems. For Nissan, that includes a sharp downturn in its business in the key U.S. and Chinese markets it heavily relies upon.<\/p>\n

\u201cWe were only able to meet 60% to 70% of our (worldwide sales and revenue) target for the year to the third quarter,\u201d Saikawa said on Monday. \u201cIf we are not careful about how we make up for that shortfall in the fourth quarter we could find ourselves in similar situations we\u2019ve seen in the past.\u201d<\/p>\n

U.S. sales for the full fiscal year are expected to slip 8.6%, to 1.46 million vehicles, while Chinese sales will come in at an estimated 1.56 million vehicles. The original target was 1.70 million. Worldwide, Nissan expects to sell 5.6 million vehicles through the end of March, off from its original target of 5.93 million.<\/p>\n

(Ghosn scandal threatens to fracture Renault-Nissan-Mitsubishi Alliance.\u00a0<\/em>Click Here<\/a><\/span>\u00a0for more.)<\/em><\/strong><\/p>\n

The executive said Nissan will avoid using heavy discounts to boost demand, focusing instead on \u201cimproving the quality of sales.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Nissan Motor Co. warned that its earnings for the fiscal year ending March 31, could be about the lowest the carmaker has seen in six years. The company blames sliding sales in the U.S. and China, which are its two largest markets. However, it’s also taken an $83.2 million charge due to the Carlos Ghosn scandal, according to TheDetroitBureau.com.<\/p>\n","protected":false},"author":2,"featured_media":112710,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","footnotes":""},"categories":[7,8,5,11],"tags":[],"make":[90],"post-state":[],"category_old":[286,150,151,123,287,173,289,299,171,138,132,284,189,125,139,290,278,288],"acf":[],"_links":{"self":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/133673"}],"collection":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/comments?post=133673"}],"version-history":[{"count":0,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/133673\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media\/112710"}],"wp:attachment":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media?parent=133673"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/categories?post=133673"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/tags?post=133673"},{"taxonomy":"make","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/make?post=133673"},{"taxonomy":"post-state","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/post-state?post=133673"},{"taxonomy":"category_old","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/category_old?post=133673"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}