Nissan’s Crisis

Nissan’s Crisis1
NISSAN’S CRISIS
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Nissan’s Crisis2
Nissan’s Crisis
1. The Likely Cause of the Crisis
 Carlos Ghosn(Former Nissan chief) was arrested by prosecutor in Japan despite being the most
authoritative automotive chief executives in the industry
 The company suspected him of understating his pay in the company’s financial statements
 Prosecutors estimate that he was responsible for $15 million losses in the company between
2015 and 2018(Ma and Nussbaum 2019)
 $5million of the above amount is suspected to have been utilized for personal expenses
 However, Mr. Ghosn considers his arrests as arbitrary and outrageous
 He denies any wrongdoing and was freed on bail after spending 108 days behind bars
 He contends that his arrest is an attempt by some Nissan’s stakeholders to silence him and
mislead the prosecutors.
 Therefore, Nissan’s crisis is attributable to financial misconduct by its chief executive officer,
Mr.Carlos Ghosn.
2. The potential consequences of the crisis
 X-Nissan’s chief executive officer arrest has attracted worldwide attention
 Carlos Ghosn is acknowledged as the man behind the alliance between Mitsubishi,
Renault(French carmaker), and Nissan
 His arrest has resulted in significant damage to the alliance including decline in revenues,
damaged reputation, and decline in the price of its shares
 The alliance spent two months dealing with damage to its reputation caused by the arrest
of Ghosn.
 The scandal resulted in the decline in sales in China and the United States.
 Competitors in the industry including Toyota Motor Corp and Volkswagen are taking
advantage of the negative publicity to increase their sales and widen their market share
 Nissan’s is the most affected because Ghosn allegations are attributable to his tenure in
the company