Nissan Motor Co Ltd (7201.T) Chief Executive Carlos Ghosn will chair Mitsubishi Motors Corp (7211.T) after Japan's second-biggest automaker by sales buys control of its smaller peer, two people with knowledge of the matter told Reuters on Wednesday.
Ghosn, nicknamed "le cost killer", will oversee an automaker expecting an operating loss of 28 billion yen ($270.69 million) in the year to March. Behind the loss are provisions to cover any quality-related issues that arise while Mitsubishi recovers from a mileage-cheating scandal that sent its shares spiralling.
The two automakers have not decided who will be president of Mitsubishi, said one person with direct knowledge of the matter and another briefed on it. Both declined to be identified ahead of formal announcements.
Ghosn, who is also CEO of Nissan alliance partner Renault SA (RENA.PA), has asked Mitsubishi Motors Chairman and President Osamu Masuko to remain president when Nissan takes over, said the Nikkei newspaper, which first reported Ghosn's appointment. Mitsubishi's shares rose as much as 10 percent after the report.
Spokespeople at Nissan and Mitsubishi declined to comment when contacted by Reuters.
LE COST KILLER
Ghosn earned his nickname after ordering plant closures when restructuring Renault. He later steered Nissan to profitability. "This
is a man who patched up Renault in the 1990s, and he did a lot for
Nissan in the 2000s, so I'm sure he looks at Mitsubishi Motors as a new
challenge," said CLSA analyst Christopher Richter. "He's
a turnaround artist. This is what he does best," said Richter. Ghosn at
the helm of Mitsubishi Motors' board would "remove an enormous burden
from the Mitsubishi group companies," he said. The
appointment "should be good (for Mitsubishi Motors)," said Yasuhito
Hirota, Executive Vice President at shareholder Mitsubishi Corp (8058.T). "He is likely to be better than anybody else," he said, declining to elaborate. SCANDAL Nissan in May said it
would buy 34 percent of Mitsubishi Motors for around 237 billion yen
after Mitsubishi admitted to falsifying the mileage of four minivehicle
models, including two made for Nissan. In August, it was found to have
overstated the mileage of eight more models. Mitsubishi Motors blamed poor communication, lax governance and internal pressure. Nissan
is set to finalise its purchase by the end of 2016, after which the
shareholding of Mitsubishi group companies - trading house Mitsubishi
Corp, Mitsubishi Heavy Industries Ltd (7011.T)
and Bank of Tokyo-Mitsubishi UFJ Ltd [MTFGTU.UL] - will be diluted to
17 percent from around 34 percent before the deal was announced. Nissan has said it will not sell its stake to a non-group company without Mitsubishi Motors' consent for 10 years. Mitsubishi Motors will decide executive appointments after a December shareholder meeting, the Nikkei reported.
