Ghosn planned to remove Saikawa as Nissan CEO before arrest in Japan, sources say

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Ghosn wanted to review the management of Nissan, partly because he was not satisfied with Nissan's financial performance under CEO Saikawa, according to sources.

TOKYO – Carlos Ghosn was planning to remove Nissan CEO Hiroto Saikawa before Ghosn was arrested in Japan last month for alleged financial misconduct, people who were familiar with the matter said.

Ghosn, who was then chairman of Nissan Motor Co., planned to plan a broader shake-up of management and part of the blueprint included a new CEO, two people with expertise.

The timeline of the shuffle was unclear. One source said that Ghosn was planning to discuss the reorganization during a trip to Japan in November with a view to its implementation in the spring.

"He was preparing for a shake-up that was going to affect Saikawa," said the other source. "It was a way to another CEO."

But Ghosn never had the chance to discuss the matter with the Nissan administration.

The authorities arrested Ghosn on November 19 after his plane landed in Tokyo. He has since been detained in a prison in Tokyo, because investigators are investigating the accusations that he has hidden about $ 8 million in compensation for financial records for eight years. The Nissan administration ousted Ghosn as its president three days after his arrest and is scheduled to meet on December 17 to appoint a replacement.

The story of Ghosn to remove Saikawa as CEO was reported Sunday by The Wall Street Journal.

Approval required

Any plan to remove Saikawa would require approval from the board. A Nissan spokesperson said the company "was not able to comment on a very speculative story of this nature."

Ghosn maintains his innocence, according to a person close to the family. But the man who had been credited with saving Nissan from bankruptcy almost two decades ago could be accused on Monday of allegedly reporting too little of his compensation for official disclosures.

Ghosn wanted to take over the management of Nissan, partly because he was not satisfied with Nissan's financial performance under Saikawa, according to the people. Nissan's operating result fell by 17 percent in the first half of the current fiscal year ending September 30, 2018.

Ghosn was also critical of how Saikawa tackles the ongoing latest inspection scandal in Japan, leading to lower profits and forced Nissan to recall more than 1 million vehicles in its home market, a person said. Despite attempts to eradicate the problems, Nissan continues to undercover new inspection surveillance. The latter was announced on December 7 and caused 150,000 more recall campaigns.

Saikawa's age was another reason, the source said. He is 65 and is approaching retirement. Ghosn is 64.

Saikawa himself can come under pressure from the allegations of financial misconduct against Ghosn. Japanese media report that the company is expected to be charged with Ghosn for misrepresenting its earnings in official documents.

Ghosn / Saikawa clash

Ever since he became Nissan CEO, Saikawa has quickly switched to reverse many of Ghosn's strategy of setting ambitious numerical goals. He also criticized Ghosn's incentive to prioritize market share and volume in key markets such as the United States, often at the expense of profitability.

Nissan's previous business plan, launched by Ghosn in 2011, dictated a lot of sales and market share, including the controversial drive for a 10 percent market share in the US by March 31, 2017.

Named Power 88, the plan derived its name from its two distinctive numerical goals: operating profit margin of 8 percent and worldwide market share of 8 percent.

The company could not touch both targets.

Jose Munoz – at that time Chairman of Nissan's North American operations – delivered the US 10 percent, but only briefly. Nissan and Infiniti reached a combined 10.2 percent in February 2017.

Ghosn was sent out by Renault in 1999 to take over a waving Nissan as COO. He became Nissan president the following year and was CEO from June 2001. He gave up his CEO title at Nissan last year.

Saikawa served as co-CEO with Ghosn for a year, starting in 2016, before becoming the sole CEO.

Lindsay Chappell contributed to this report.