If the alliance of Nissan, Renault and Mitsubishi is to survive, the key may be a man named Carlos. No, not the guy who is getting ousted as chairman—and just got arrested in Japan. That was Carlos Ghosn, one of the best known—and most effective—auto executives who ever lived.
No, the Carlos I have in mind is Carlos Tavares, who had a long career at Nissan, moved over to Renault (as group CEO), and is now chairman of the managing board at another French giant alliance, PSA (Peugeot, Citroën, Vauxhall, Opel).
Tavares is the only guy with the stature and international flair to keep the alliance together. I spent time with him when he was president of Nissan North America, and it seemed to me he had the same level of drive as Ghosn. The guy is hugely ambitious. He left Nissan in 2013, telling Bloomberg at the time that Carlos Ghosn wasn’t going to clear a path for him, and that instead he wanted to head a big American automaker. “My experience would be good for any car company,” he said. “Why not GM? I’d be honored to lead a company like GM.”
That was gutsy, huh? He didn’t get GM, but he might have done as well as Mary Barra. He’s refreshingly open in conversation, not something that could be said of Barra. Tavares was recently heard complaining about stringent carbon dioxide standards in Europe—imposed by countries that don’t have auto industries, he said. “We understand that because of Volkswagen you think we are all crooks now," Tavares lectured the European Union. “But if you chose not to listen to us, the responsibility becomes yours, not mine.”
Tavares, who’s fluent in English, wants back into the U.S. market. He led the purchase of Opel from GM (for $2.6 billion), and he plans to use its engineers to put together cars Americans would actually buy (there aren’t many in the lineup now). Peugeot has been out of the U.S. market for more than 20 years, and Citroën longer. The first U.S. offerings might be ride services.
It’s clear that Tavares has turned the unwieldy PSA giant around. This is Automotive News earlier this year:
Tavares, 59, was named CEO of PSA Group in 2013, when it was piling up losses and near death. Within the first three years of what was supposed to be a five-year turnaround plan, he had resuscitated France’s second-largest automaker and moved on to a new long-range plan aimed at accelerating its progress. PSA's 7.4 percent operating profit margin in the first half of last year pushed it into the top five among global automakers, Tavares said.
OK, now that I’ve said my piece about the succession, let me ask, What the Sam Hill was Ghosn thinking? Why would he risk his career, his reputation, even his freedom (he’s in jail, after all) for some money he plainly didn’t really need? As Tavares said, after VW it’s easy to think that all auto executives are crooks. Carlos Ghosn with his hand in the cookie jar reinforces that impression.
Ghosn is 64. His compensation from Renault was $8.5 million in 2017, and from Nissan $6.5 million. He was on his way out the door, having stepped down as CEO of Nissan and planning an exit from the alliance in 2020. He could have retired with dignity, joined a few boards, bought houses all over the world, written his autobiography, dated models (maybe not that one—he’s married, with grown kids), and had the time of his life. What is it with these guys?
The crime was underreporting his salary in official filings by….wait for it…$44 million. He didn’t want to pay taxes! I’ve been at events with Ghosn a bunch of times, and he was commanding in front of a crowd—wherever it was in the world. The Japanese auto industry is notoriously insular, and Ghosn opened it up to the world and through sheer force of will reconciled it with the far different culture at Renault, and later, Mitsubishi too. He was at home in front of audiences anywhere.
Maybe we’ll learn more about this, including Ghosn’s side of the story—though it’s hard to see him explaining this little misadventure away. Michelle Krebs, director of automotive relations for AutoTrader Group, cautions that there’s more to come. “I think there are many layers to this story that will be revealed,” she said. “He clearly was a giant in the auto industry and the global business stage with many amazing accomplishments. It is a sad way to end an illustrious career. What happens to the alliance remains to be seen. There have been battles for months about how it should be structured. With Ghosn out, it may well be reconfigured.”
That gives you a sense of how powerful this one guy is. Or was. Ghosn is toast, not much better off than if he’d been caught up in the Me Too movement. A really inspiring story now has a sour ending. But maybe if the other Carlos takes over the alliance will have an interesting sequel.
Here's a video I shot of Tavares as he handed the keys to a Nissan Leaf to a first San Francisco customer: