TOKYO (Reuters) – In sacking his long-time mentor Carlos Ghosn as chairman of Nissan Motor Co Ltd (7201.T), CEO Hiroto Saikawa has only bolstered his reputation for being a tough leader unafraid to antagonize people in the interests of business.
FILE PHOTO – Nissan Motor Co’s President and CEO Hiroto Saikawa speaks during a news conference at the company’s headquarters in Yokohama, Japan May 11, 2017. REUTERS/Toru Hanai/File Photo
Thursday’s board decision to oust Ghosn, one of the most celebrated leaders in the auto industry, comes after he was arrested in Japan this week, accused by Nissan of serious financial misconduct over many years.
Saikawa is described by company insiders as smart, exacting and results-oriented. He will have to marshal those qualities as he tackles reputational loss, legal and regulatory issues, as well as suspicions that the arrest was a coup engineered by board members unhappy with Ghosn and the alliance with Renault SA (RENA.PA).
“He’s very strong and aggressive,” said a Nissan executive, adding Saikawa was not afraid to embarrass people in meetings if their performance fell below his standards.
“There are people who love him and people who hate him – people who don’t like him because he is very strict,” said the executive who, like other company insiders Reuters spoke to, declined to be identified due to the personal nature of their comments.
Nissan has accused Ghosn of using money for personal purposes and under-reporting income. According to Tokyo prosecutors, Ghosn is suspected of reporting only half of some $88 million in earnings over a five-year period.
Reuters was unable to reach Ghosn, who has been detained by Tokyo prosecutors, or a lawyer for him.
Saikawa only became CEO last year, having been groomed by Ghosn for the job over many years.
Another Nissan executive described Saikawa as unflinchingly scrupulous, adding this would have certainly played into how he dealt with the allegations concerning Ghosn once they surfaced within the company.
“He’s very much ‘by the book’. He has one phone for personal use and one for company use and when he rings his family, he never uses the company phone,” he said.
The executive noted that last year’s scandal at the Japanese automaker over improper inspection procedures in the domestic market would have made Saikawa even more cautious.
“Saikawa’s been dealing with the inspection problem since last year and where matters of compliance are concerned, he’d be of the belief that you just can’t turn a blind eye.”
Nissan declined to comment on the executives’ assessment of Saikawa. Saikawa could not be reached for comment.
NOW A GHOSN CRITIC
At a news conference on Monday to explain the arrest, Saikawa, usually a very fast talker, earned praised on social media for the unhurried and dispassionate way in which he answered questions for close to 90 minutes, unflanked by lawyers or other company officials.
“It was also quite telling how he did not stand and bow in apology,” said a former Nissan executive, adding it was as if Saikawa was signifying that he personally was not at fault.
Saikawa on Monday was also frank in his assessment of Ghosn’s shortcomings, saying too much power had been concentrated at the top of the company. In addition to the alleged financial misconduct, there were times where Ghosn made decisions without seeking the input he should have, he added.
Saikawa was, however, not his usual composed self at a meeting with department chiefs on Tuesday, according to two people who attended. One said he looked like he “had tears in his eyes” and another said his voice quivered at one point.
Like everybody else at Nissan and Renault, Saikawa’s career has long been overshadowed by Ghosn, the charismatic “Cost Killer” credited with turning around a debt-ridden automaker by closing 5 plants and cutting 21,000 jobs – drastic steps that broke new ground in Japan and were widely seen at the time as something only an outsider could do.
But now it is Saikawa’s turn in uncharted waters.
Ghosn had been seen by many analysts as the only person who could make the three-way alliance between Nissan, Renault and Mitsubishi Motors Corp (7211.T) work.
“It’s going to be extremely difficult for Saikawa,” said Takeshi Miyao, managing director of consultancy Carnorama, noting it was not clear if Renault, Nissan’s biggest shareholder with a 43.4 percent stake, would be supportive.
While Saikawa has served on Renault’s board for 10 years, he does not have Ghosn’s experience in dealing with the French government or the length of experience Ghosn gained in leading Renault and before that as a senior executive at Michelin.
“But he’s a tough negotiator. Ghosn wouldn’t have picked him as CEO if he wasn’t,” Miyao said.
Saikawa, who at 65 is a few months older than Ghosn, joined Nissan from the prestigious Tokyo University more than 40 years ago. Described by some as reluctant to stand out, little is known about his private life, beyond that he is married.
He has spent much of his career managing purchasing and supply chains, and helped Ghosn break up Nissan’s supplier network to reduce costs.
Acting as chief competitive officer from 2013 to 2016, he was tasked with reducing manufacturing costs by saving money in raw material procurement, regulatory expenses and planning and development. Saikawa was also instrumental in hammering out the details of Nissan’s deal to bring Mitsubishi Motors into the alliance.
“He’s very much a numbers man – he’s hard on those that don’t deliver results, although he’s also hard on himself,” said the former Nissan executive. “Some might say that he lacks warmth.”
Reporting by Norihiko Shirouzu and Maki Shiraki; Additional reporting by Elaine Lies, Makiko Yamazaki and Sam Nussey; Editing by Edwina Gibbs and Alex Richardson