Nissan shareholders furious at Ghosn scandal and dismal results

Carlos Ghosn
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Updated 18 February 2020

Nissan shareholders furious at Ghosn scandal and dismal results

  • One furious investor proposed bounty on former chief now living in Lebanon

TOKYO: Nissan shareholders vented their outrage at the Japanese automaker’s top management Tuesday for crashing stock prices, zero dividends and quarterly losses after the scandal-ridden departure of former Chairman Carlos Ghosn.

They got up, one by one, at an extraordinary shareholders’ meeting, demanding that Nissan Motor Co. quickly fix diving car sales, work harder to repair its battered brand and have executives give up their pay.

Ghosn, a superstar executive who had led Nissan for two decades, was arrested in November 2018. He was awaiting trial on financial misconduct charges in Tokyo when he skipped bail late last year and escaped to Lebanon.

New Chief Executive Makoto Uchida apologized for having “allowed the misconduct” of Ghosn and promised better governance, transparency and financial results, but pleaded for more time.

He said a turnaround plan will be announced in May, which one shareholder immediately criticized as too late.

“We are in a disastrous situation,” Uchida said of the Ghosn scandal. “It was shocking, and I denounce it.”

Uchida is among the four directors whose election was up for vote at the meeting held at a conference center in Yokohama, near Tokyo, where Nissan is headquartered.

FASTFACT

44%

Renault owns 44 percent of Nissan.

Uchida was tapped in December to replace Hiroto Saikawa, who was Ghosn’s successor.

Saikawa tendered his resignation last year after allegations surfaced about his own dubious personal income. Saikawa’s resignation becomes final at the end of the shareholders’ meeting.

One shareholder asked if Saikawa was giving up his retirement pay.

Another asked why Jean-Dominique Senard, chairman of French alliance partner Renault SA and Nissan board member, was seen leaving a previous shareholders’ meeting in a Toyota.

Saikawa did not reply. Senard apologized and said it was a mistake that had upset him as well.

Global sales of Nissan vehicles have plunged. Nissan recorded red ink for the quarter through December, the first such quarterly loss in 11 years.

Nissan’s prized technology, such as electric vehicles and automated driving, will be featured in planned models, Uchida said.

Also up for approval at the meeting was the appointment of Nissan Chief Operating Officer Ashwanti Gupta, who joined Renault in India in 2006, and has since worked for the alliance, which also includes smaller Japanese automaker Mitsubishi Motors Corp.

The appointment of Nissan’s production expert Hideyuki Sakamoto and Pierre Fleuriot, a risk management specialist and independent director at Renault, was also up for vote.

Renault owns 44 percent of Nissan and so the proposals were certain to pass. The appointments were welcomed by clapping at the end of the two-and-a-half hour meeting. The executives bowed on stage.

But hanging over the entire meeting was Nissan’s plummeting fortunes, its reputation tarnished over not only the Ghosn scandal but the shaky way it was handled at the company.

Shareholders said they saw confusion in management.

One argued no one would want to buy a car from a company that looked as disorganized as Nissan. At one point, several shareholders began shouting at each other.

Another shareholder proposed putting a bounty on Ghosn so he could be brought back to stand trial. Japan and Lebanon do not have an extradition treaty.

Ghosn, who has insisted on his innocence, has said he was targeted with trumped up charges because of what he called a conspiracy at Nissan to block a fuller merger with Renault.


British Airways burning through cash, CEO urges unions to engage

Updated 04 June 2020

British Airways burning through cash, CEO urges unions to engage

  • Job losses necessary as cash reserves of IAG, British Airways’ parent company, would not last forever

LONDON: The boss of British Airways said its parent company IAG was burning through $223 million a week and could not guarantee its survival, prompting him to urge unions to engage over 12,000 job cuts.
British Airways came under heavy attack from lawmakers in parliament on Wednesday, who accused it of taking advantage of a government scheme to protect jobs while at the same time announcing plans to cut its workforce by 28 percent.
Planes were grounded in March due to coronavirus restrictions, forcing many airlines to cut thousands of staff as they struggle without revenues. Airlines serving Britain now face an additional threat from a 14-day quarantine rule.
In an internal letter to staff seen by Reuters, Alex Cruz, the chief executive of British Airways said the job losses were necessary as IAG’s cash reserves would not last forever and the future was one of more competition for fewer customers.
BA also wants to change terms and conditions for its remaining workers to give it more flexibility by, for example, making all crew fly both short and long-haul.
Cruz said IAG, which also owns Aer Lingus, Iberia and Vueling, was getting through $223 million a week, meaning that it could not just sit out the crisis. The group had €10 billion of liquidity at the end of April.
“BA does not have an absolute right to exist. There are major competitors poised and ready to take our business,” Cruz said in the letter.
He urged two unions which represent cabin crew and other staff, GMB and Unite, to join in discussions to mitigate proposed redundancies. Pilots union BALPA is “working constructively” with the airline, he added.
Cruz also joined other airline bosses in criticizing Britain’s quarantine rule, due to come into effect on June 8, calling it “another blow to our industry.”