At Nissan's annual meeting, some wonder if Ghosn era was better

River Davis
Bloomberg
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Two-and-a-half years after Carlos Ghosn's arrest, Nissan Motor Co. is still struggling to emerge from the scandalized affair involving the former chairman and chief executive officer.

Shareholders at the Japanese automaker's annual meeting on Tuesday repeatedly questioned executives about the events surrounding Ghosn's 2018 arrest, suggesting that Nissan was perhaps better off during the former auto executive's era of management.

"Under Ghosn's leadership there were a lot of good things. There were a lot of beautiful flowers within Nissan," one said during questioning at the company's headquarters in Yokohama, pointing to a period four years ago when the three-way alliance of Nissan, Renault SA and Mitsubishi Motors Corp. topped global sales volumes.

In this Sept. 29, 2020, file photo, former Nissan Motor Co. Chairman Carlos Ghosn holds a press conference at the Maronite Christian Holy Spirit University of Kaslik.

Nissan has posted two straight years of losses since Ghosn was arrested on charges of financial misconduct, albeit as the global automotive industry as a whole has faced numerous disruptions from the pandemic and a crippling shortage of semiconductors. Last year, Nissan unveiled a turnaround plan that involves breaking away from the Ghosn-era strategy of selling cars at steep discounts to increase market share, which cut into profits.

The shareholder was not convinced: "Incentives and discounts — those are evil? Even with incentives it's better to sell cars, don't you think?"

Makoto Uchida, who took over as CEO a year after Ghosn's arrest, stuck behind Nissan's current strategies, arguing that much of the pain the company is feeling today stems from brand damage caused by pursuing volume too intensively in the past. "Nissan is making steady progress with its business transformation plan," with April and May performance exceeding expectations, Uchida said.

The automaker posted a 151 billion yen ($1.4 billion) operating loss in the recently ended fiscal 2020 year and is targeting flat annual profit for the current year. "We're doing everything that we can to avoid making losses three years in a row," Uchida said.

During the course of the roughly two-hour meeting, executives were also quizzed about media reports indicating individuals at Nissan had conspired to have Ghosn arrested, which Uchida said had no merit. Another shareholder opposed the re-election of directors who were present when Ghosn was removed because the matter should have been handled internally without damaging Nissan's brand value, he said.

Ghosn, who escaped trial in Japan at the end of 2019, is residing in Lebanon and has denied the charges of financial misconduct. Greg Kelly, the former Nissan director who was arrested alongside Ghosn, is fighting the charges against him in an ongoing trial in Tokyo.

At the end of the annual meeting, shareholders approved the reappointment of Uchida and 11 other directors. Renault is Nissan's biggest shareholder with a 43% stake in the Japanese automaker. Another proposal that would have seen Nissan and Renault's alliance agreement disclosed was rejected.

"With regard to the former chairman, we have caused concern to shareholders," Uchida said. "Trust is not something that can be built back over night. However, we are seeing signs of recovery."

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