By Chris Bryant
If there's one thing everyone should know by now about fugitive auto executive Carlos Ghosn, it's his gift for self-publicity and theater.
Though not quite rivaling the daring escape from Japan in 2019 following his arrest on financial misconduct charges (which he denies), news that Ghosn is suing his former employer Nissan and related individuals for a whopping $1 billion in damages is pretty entertaining. For context, that's more than 5% of Nissan's market capitalization.
The legal maneuver casts a spotlight on the unhappy Renault-Nissan marriage and Ghosn's undeniably shabby treatment by Japan's legal system (including a lengthy period of solitary confinement) at an unfortunate moment. Lately Renault and Nissan have sounded sincere about their determination to put tensions in their alliance behind them and plot a fresh course by equalizing their respective share holdings. Meanwhile, global investors have begun to look more favorably on Japanese stocks, in part due to perceptions that corporate governance has improved there.
Ghosn insists Nissan concocted an illegitimate plan to have him arrested due to fears he wanted to deepen the Renault-Nissan alliance. Japan has accused him of underreporting personal income, while France is seeking his detention in relation to misuse of company assets.
The fact that he is suing in Lebanon - where he is a popular figure and has lived since going on the run and can't be extradited - makes me think he has little hope of recovering any money from the Japanese, who surely won't fully cooperate, if at all. A U.S. lawsuit, and associated legal discovery, would be a far more daunting for Nissan.
The financial claim, comprising more than $500 million in forgone pay and stock, plus a similar amount of damages for defaming his character and hurting future employment opportunities, is a reflection of Ghosn's high opinion of his talents as a globe-trotting auto executive. He has rarely missed an opportunity, including in this lawsuit, to remind the world he could have earned far more working elsewhere.
However, the gargantuan sum is rather tone deaf in view of the furor about Ghosn's lavish spending while he ruled over the Renault-Nissan alliance. (Remember the Marie-Antoinette themed Versailles palace party?)
Under a fence-mending agreement announced in February, Renault will cut its Nissan stake to 15% with the remainder put in trust pending its possible sale. The fact that Renault held a 43% stake in Nissan, while the Japanese held only a 15% share of the French company (with no voting rights) was a perennial source of tension. The pending departure of Nissan executive Ashwani Gupta, who reportedly had resisted certain concessions to Renault, may speed up the peacemaking process.
Naturally, the architect of the alliance is not a fan: Ghosn's lawsuit calls the reset a "disastrous agreement," without elaborating.
Renault's new chief executive officer, Luca de Meo, has moved fast to turn around the French group, and his plan to carve out its electric vehicle business, Ampere, ahead of a potential stock market listing later this year, is in my view a promising way to highlight its strengths in battery-powered vehicles. If you're skeptical, I urge you to check out the very attractive Renault Megane E-tech; the forthcoming Renault 5 city car revival looks even better. Ampere aims to break even as early as 2025, Renault said on Monday, and Nissan has pledged to purchase a minority stake in the new company, all of which is encouraging.
But both Renault and Nissan have a lot of catching up to do. Their stocks remain far below the levels when Ghosn was detained in 2018. Nissan's profit margins remain disappointing, while Renault is potentially vulnerable to a price war in Europe spurred by Tesla and emerging Chinese competition. Meanwhile, Fiat Chrysler and Peugeot have piled on pressure by merging to form Stellantis.
There's little likelihood Nissan will have to cut Ghosn a big check anytime soon. However, his presence in the theater wings, seeking financial retribution, is an unhelpful reminder to investors that the Renault-Nissan story is destined to be overshadowed by drama.
Chris Bryant is a Bloomberg Opinion columnist covering industrial companies in Europe.
** The views expressed do not necessarily reflect the views of Independent Media or IOL.
WASHINGTON POST