Nissan chief admits Carlos Ghosn wielded ‘absolute power’

Nissan’s chief executive has apologised to a Tokyo court and pledged to fix the problems that led to Carlos Ghosn amassing “absolute power” as he blamed his former boss for clinging to power for too long. 

Makoto Uchida, who took the helm of the Japanese carmaker a year after the former chair was arrested in November 2018, said two decades of the Ghosn reign led to serious governance lapses and a workplace where employees “just wanted to please the boss”. 

“We were only trying to play the melodies that sounded good to our boss,” Uchida told the Tokyo District Court on Wednesday. “The lack of transparency led to the cause of the misconduct in question. It put all authority into the hands of one person. That absolute power applied to compensation and personnel matters.” 

Uchida testified as a witness for Nissan, which has been charged alongside Ghosn for understating the ex-chairman’s pay in financial documents through a scheme of deferred pay. The company has not disputed the charges. 

“I am sorry for all the trouble we have caused, and for making you lose trust,” Uchida said. “We acknowledge where we went wrong, we apologise and we fix it.” 

Ghosn fled Japan for Lebanon in late 2019 in an escape orchestrated by a former US Green Beret, who pleaded guilty at the Tokyo District Court last month. Greg Kelly, his former deputy, is also accused of conspiring with Ghosn to understate his pay. Both Kelly and Ghosn have denied the charges.

Uchida said he felt “both ashamed and miserable” after he found out about the arrests of Ghosn and Kelly. “Nissan’s brand was damaged, the company employees’ motivation was hurt and their trust in the top management was damaged,” he said.

In his testimony, Uchida also directly challenged statements by Kelly and his legal team that presented Ghosn as an executive upon whose future Nissan absolutely depended. 

According to Kelly and other former Nissan executives, concerns over Ghosn’s retention intensified after his pay was reduced to address a change in Japan’s rules on pay disclosure introduced in 2010.

Ghosn, who was one of the most highly paid executives in Japan, feared that the disclosure of his full salary would cause a public backlash and demotivate employees at Nissan. 

“I think he was in the CEO position for too long,” Uchida said, adding that he did not think Nissan would have struggled had Ghosn left the company.

Since Ghosn’s arrest, however, Nissan’s share price has fallen 42 per cent while the company expects a third consecutive year of net losses.

With the creation of a new management team as well as new governance structures, Uchida said the company would no longer allow a single individual to wield so much power.

“We are moving towards a culture where people feel free to speak up,” he said.