Car News: The Japanese Chop

A weekly look at all that’s rotten about car ownership, and some good bits

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Carlos Ghosn, boss of Nissan and Renault, the man who gave us the ‘Twizy’

Read any Michael Heseltine owned Haymarket publication devoted to the automobile, either street cars of racing cars, and alert readers will realise how lazy are its journalists. In that they are no better than the British press.

One particular journalist who shall remain nameless has not got much good to say about the weak and almost useless British unions. Union bosses are the casualty of errant union officials. As far as he’s concerned they brought down the British motor industry, not the ineptness of the boss elite, not poorly designed and built and tested cars. It was all the fault of workers who took one hour naps in car boots when they should have been tightening poorly made nuts and bolts while balancing on a too fast moving assembly line. This week the nose pickers of our British auto press got a shock.

The first reports emerging from the Japanese media were pure high drama: prosecutors had descended on Nissan’s corporate headquarters to question and then fire the firm’s chairman Carlos Ghosn, on financial ‘irregularities’. It appears Ghosn had only declared publically and one supposes, for tax reasons, a portion of his vast salary, the same man British car magazines revered as a saint, a man who could raise Lazarus from the dead and any moribund car company he laid hands on.

Now, it’s true, Ghosn is the man who helped revive the fortunes of Nissan and Renault. He could not have done it without redundancies and the hard work of remaining staff.

Until now Ghosn was considered a giant in the automotive universe, unassailable, the ruthless cost-cutting saviour of Nissan and Renault, the far-sighted progenitor of Renault’s successful electric car division, a man who could change a red line to a blue line at the snap of his fingers and the loss of thousands of jobs to the unemployed queue. When a company gets into trouble staff redundancies is solution Number One and Ghosn knew the Book of Quick Fixes. Well, now the same has hit him, by the sword, so to speak.

Nissan issued a statement making plain it had contacted the Tokyo district public prosecutors office following an internal investigation sparked by a whistle-blower. To go that far has only one significance – the evidence that investigation had unearthed against Ghosn and representative director Greg Kelly was so serious as to recommend the board remove both from their roles, which duly took place – on the spot!

How will the probable fall (Ghosn will surely have a defence) of the most powerful car boss on the planet affect car owners in Scotland? Just like Scotland made independent, or the day after a wedding, the world will appear the same as yesterday.

Normally, the large scale of major international car firms means that it can take time for the impact of major events to be felt. You only need reminding of VW and ‘Diesel Gate’ to understand the length corruption takes to reach public awareness, and even longer to reach government regulators and the courts. In this case, the Japanese moved with an unnerving speed. Thus, to answer my own question directly, a lot depends on who is the next boss of one or both companies: will he recommend they are split apart as before? Will he stop sharing car platforms, engines, research, close down unprofitable divisions propped up by the ones making money? As change gains momentum it filters down to your local dealer and whether they will continue as before offering the same services.

The revelation begs the question why there is so much power handed to one person? It has an echo of the Royal Bank of Scotland led by an arrogant bastard biting off staff heads in the way you and I might use a coffee break to chat to colleagues, his daily routine of humiliating staff, while assuming his judgement was unassailable, God-given. No surprise to hear Nissan’s CEO, Hiroto Saikawa criticise Nissan’s “weak” corporate governance structure, which put so much power in Ghosn’s hands without checks in place, the alleged wrongdoing undetected.

Readers are forgiven for asking will this make a blind bit of difference to the constraints on CEOs the world over, let alone their miserable conscience. Bosses filling their pockets with ludicrously vast salaries and expenses are the ones making sure their board stay schtum because they too award themselves high salaries, not forgetting megabucks golden handshakes – the robber barons of the Millennium.

The type of person discussed here gets to where they are by making sure close colleagues are hand-picked, and underlings cower in fear of losing jobs. They reach the heights of Grand Theft Auto Company because they do have real organisational ability. While the company makes money few dare challenge their judgement or methods of rule.

Still, it is interesting to see the Japanese way of owning up compared to, say, the bluster and bullying tactics of Sir Phillup My Pockets Green. Perfunctory apologies and telling the press to bog off or they’ll get thumped don’t figure in the Japanese code of conduct.

Having laid out the three areas in which Nissan had found ‘serious misconduct’ by Ghosn and Kelly, Hiroto Saikawa offered his “deep apologies”, promising “immediate and fundamental” steps to prevent such incidents happening again. (A phrase heard a lot in big business.) Anger obvious, he said: “Beyond being sorry, I feel big disappointment and frustration and despair. I feel despair, indignation and resentment”, adding that people “will feel the same way” once all the details emerge.

Saikawa wasn’t finished. He expressed his personal opinion that Ghosn’s concentration of power within the Renault-Nissan-Mitsubishi Alliance was a key factor in enabling the ‘irregularities’ the firm has unearthed.

There are plenty of other developments to consider, from what happens to Ghosn (who has vanished out of media sight) to whether Japanese authorities actually like non-Japanese running their companies.

GROUSEY’S FOOTWELL FINDS

Gas station prices

The price of petrol is still at least 5p a litre too expensive, says the RAC. Today’s 3p a litre price cut by Asda (which follows a 2p per litre cut on 2 November) is welcome, but a long time coming… and needs to quickly now be followed by other fuel retailers. “The cost of buying petrol on the wholesale market has dropped like a stone,” said RAC fuel spokesperson Simon Williams. “We should be looking for at least 5p to come off the average price of unleaded at the pumps of 128.6p.” The motoring organisation says that by delaying cutting prices at the pumps, “Christmas has come early for fuel retailers… they have been reaping the benefits of some of the biggest margins on fuel the RAC has seen in almost four years”.

Edinburgh Airport short stop hike.

Use to be £1 for five minutes. Now it ‘s £2. No extra parking spaces offered, no extra facilities, no increase in cleaning staff, nobody cleaning your windscreen while you unload or load luggage, nothing to justify a 100% increase. I put in £1 and two 50p pieces. One 50p didn’t register so I threw another £1 into the machine slide. £2,50 for 4 minutes. We have no authority to stop the profiteering. Please, on independence, let’s make airport accountability a priority. And while I’m in an angry mood, I do not want forced to walk though an over-priced, glitzy gift shop full of bored assistants standing around looking glaiket next to £100 thimbles of perfume, boxes of chocolates with portraits of royalty on the lids, lifeless teddy bears wearing fake tartan scarves, and seas of watches I don’t need, all washed in artificial light just to reach the safety of a waiting area.

Guangzhou Motor Show

This must be Oriental Week. The Chinese motor Show is happening. Each year the Chinese Auto Show divests itself of another batch of the shameless copies of European cars that once made it a laughing stock to exhibit clever designed cars. (Don’t smirk; we used to copy high quality Chinese goods like mad, such as porcelain.) An interesting feature of this year’s show is electric cars. Armed with ever-improving battery technology, the latest generation of Chinese-produced electric cars advance well beyond the 185-mile range that dogged their early year sales. Some now progress on to 250, 300 and, in exceptional cases, up to 370 miles. As I said in a Car News earlier this year ‘the Chinese are coming’.

 

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6 Responses to Car News: The Japanese Chop

  1. Japanese media do tend to give prominence to the prosecution side (especially NHK). But, as newspaper headlines soon after the arrest stated – this could be a “coup-d’etat”. Ghosn is not a reader or speaker of Japanese, as far as I know, and will have relied on internal advice many times – “sign here, please”; “this is all quite normal” mondai nai…. it’s just so easy to imagine. A statement today by a co-accused does hint at this..

  2. Grouse Beater says:

    Well, your reasoning could be correct, but it presupposes Ghosn had no lawyer who could interpret Japanese, or indeed was given a contract in English.

    Strange how a man credited with reviving the fortunes of Nissan and Renault should be overthrown so swiftly. At the very least you give achievers an honorable exit.

  3. Lanark says:

    A few mechanics I know have all said that while Renault cars have improved in the last decade or so, Nissan have lost the dependability they used to have. Whether this is the case or not and how much is due to Mr Ghosn would be interesting to know.

    Any owners agree?

  4. Grouse Beater says:

    You may have got onto to something there, Lanark, Nissan’s best sellers fell down the ranks of reliability last two years, Most notable their best selling SUV the Qashqai. Out of a 100 cars surveyed it came 85th, poor reliability, engine and build. Running costs are high too. A shame because it is a good, practical, design, an easy to drive 5 or 7 seat SUV.

  5. Robert Innes says:

    I’m getting to the stage of needing to replace my current car, badly. I’ve started to notice a few electric cars running about which is an encouraging development, but don’t feel ready yet to buy one for two reasons.

    The first, and most obvious, is the lack of charging infrastructure if you venture from home a distance greater than half its range (and I do this quite frequently) such range still being really quite limited though improving, and the second is the rate of developments in battery technology and performance. Surely an electric car purchased now is going to be obsolete within a couple of years? Could leasing be a viable alternative?

    I’m thinking therefore in terms of buying a cheap second-hand IC powered car in the interim. Any thoughts?

  6. Grouse Beater says:

    The motor trade is suffering a serious fall in new car sales because a lot of would-be buyers are holding back exactly for the reasons you state. If you have easy access to a home charging point overnight, an electric driven car is fine, but long distance journeys mean a petrol car. Avoiding anything diesel, I’d buy second-hand, the model before the current one, the one nobody wants and is priced low. Electrification is moving fast, so expect this purchase to be your last one with a combustion engine. As for battery technology – most manufacturers have designed storage in a car where batteries can be taken out and replaced with little or no fuss. Battery driven vehicles will hold their value to a reasonable extent, same as some petrol ones do now.

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