NSANY Nissan Motor Company Ltd (PK)

By Nick Kostov 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (January 25, 2019).

PARIS -- The resignation of Carlos Ghosn as chief executive and chairman of Renault SA brings down the curtain on a decadeslong career that made him a symbol of globalization's endless march as well as its pitfalls.

On Thursday, Renault's board tapped Michelin chief Jean-Dominique Senard to become chairman of the French auto maker and appointed Thierry Bolloré, Renault's deputy chief executive officer, to take over as CEO. The moves came after France's finance minister said Mr. Ghosn had relinquished his leadership from the confines of his Tokyo jail cell.

Mr. Ghosn, who until late November was also chairman of Nissan Motor Corp., has been charged by Japanese prosecutors with understating his compensation on eight years of Nissan financial reports and causing the Japanese auto maker to pay the company of a Saudi friend who helped him with a personal financial problem. He denies any wrongdoing.

During his tenure at atop Renault and alliance partner Nissan, Mr. Ghosn broke through cultural and operational barriers in a feat many in the industry considered impossible at the time. In cracking that code, he became a model for auto executives and the embodiment of globalism itself, jetting between continents as he set higher and higher targets.

His own roots reach wide. Born in Brazil, he was sent as a child to live with family in Lebanon. He later attended two elite engineering schools in Paris, before joining French tire maker Michelin. He holds French, Brazilian and Lebanese citizenship.

Mr. Ghosn, who is 64 years old, is widely credited with saving Nissan after it teamed up with Renault in 1999. But in corporate France, where Mr. Ghosn cut his teeth, he has been seen in a less flattering light. From the halls of government to the factory towns that dot the French countryside, Mr. Ghosn's rise was viewed by many as evidence of globalism's excesses.

He collected paychecks in line with peers at multinational companies but hefty by French standards. He was laser-focused on wringing costs out of Renault's alliance with Nissan and Mitsubishi Motors Corp. And his constant travels meant he spent less time getting to know workers on the factory floor in France.

"It is an impossible job to manage such a vast empire," said Louis Schweitzer, a longtime CEO at Renault who hired Mr. Ghosn in 1996.

Mr. Ghosn, who was arrested in November, said his pay as auto-making chief was justified by his performance. His defenders said his outsize personality and round-the-clock work ethic was the glue that kept the alliance between Renault and Nissan and Mitsubishi together.

Mr. Ghosn, in an interview with The Wall Street Journal in 2017, cautioned against focusing on globalization's excesses. "If you spend your time not talking about the benefits of globalization," he said, "you end up in a situation where people don't understand why they need to continue to feed into this trend."

Renault is a vastly different company compared with the one he joined 23 years ago. More international and profitable, it is the linchpin of a globe-spanning alliance that pumped out more than 10 million vehicles in 2017 -- and Renault doesn't even sell in the U.S. Renault holds 43% of Nissan, wielding the power to appoint some of the Japanese auto maker's board members, while Nissan holds 15% of Renault with no voting rights.

The exit of Mr. Ghosn has uncovered and in some ways exacerbated tensions within the alliance. Among Nissan staff, there have been calls for a change in the balance of power between the partners and signs of resentment of Mr. Ghosn's clout and compensation as a foreigner.

Mr. Ghosn joined Renault in 1996, when the French car maker was poised to report its biggest loss ever. It was his cost cutting as the No. 2 executive at Renault that helped it return to profit and accumulate the cash that it used to make a $5 billion investment in Nissan in 1999.

Mr. Schweitzer dispatched Mr. Ghosn to Japan, where his work turning around Nissan is industry legend and earned him the Légion d'Honneur, one of France's highest honors, in 2002. He quickly became known for his results-oriented management style, particularly his willingness to reveal profit and sales targets to the markets -- then to deliver on them.

Mr. Ghosn was riding high by the time he returned to Renault in 2005 as chief executive. Renault needed restructuring, but wasn't under the same financial duress as Nissan had once been. That made the company more resistant to change, while both the government and unions opposed job cuts.

He got to work slashing costs, launching many new models and increasing the proportion of sales outside Europe significantly, all without cutting jobs.

Mr. Ghosn tried to add General Motors Co. to the Renault-Nissan alliance, but the talks with the U.S. auto maker failed. Eventually, he brought Mitsubishi in as a partner.

When the 2008 financial crisis hit, he delayed construction of factories in India and scrapped plans to make bigger cars with fatter profit margins. The synergies with Nissan, however, allowed Renault to ride out the yearslong economic downturn in Europe that followed, winning Mr. Ghosn praise inside the company.

While Mr. Ghosn was celebrated in Japan for saving Nissan, France's clubby business establishment regarded him with suspicion.

"In France he didn't have the same status as in Japan," said Christophe Sirugue, a former industry minister. "He was considered a big CEO, but people didn't know why."

There also was frustration that Mr. Ghosn spent so much time abroad running Nissan. The two companies were eight time zones and some 6,000 miles apart. Mr. Ghosn carried two briefcases, one for each company, and kept his diaries and papers separate. He also received separate pay checks.

In 2011, Mr. Ghosn was forced to apologize to three senior managers that Renault fired after wrongly accusing them of selling industrial secrets related to its electric-car program. The episode eroded his credibility and raised questions about whether one executive should be overseeing two auto-making giants.

More recently, Mr. Ghosn sparred with the French government. In 2015, the government maneuvered to increase its stake in Renault to nearly 20% from 15%, making it the company's largest shareholder. The move allowed France to apply a new law that doubled the voting rights of the state and other long-term investors.

To assuage Japanese concerns over French influence, Mr. Ghosn negotiated for Nissan to have the right to increase its Renault stake if the French auto maker were to meddle too much in its business.

The concession rankled at Renault. "Renault, de facto, lost some of its ability to act within Nissan," said one former Renault executive.

Under pressure to prepare a succession plan, Mr. Ghosn named a No. 2 at Renault last year. He also took a step back to focus on strategy and the alliance with Nissan, where in 2017 he had ceded the CEO position to a Japanese executive.

"When you have a single leader for two companies, you can't stop people saying he favored one or the other," said one executive who has worked closely with Mr. Ghosn at both car makers. "He never listened. He did his job."

Write to Nick Kostov at Nick.Kostov@wsj.com

(END) Dow Jones Newswires

January 25, 2019 02:47 ET (07:47 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.