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Nissan seeks clean slate with exit of CEO, but challenges remain

Tokyo

CRISIS-HIT Japanese carmaker Nissan hopes the resignation of its embattled chief executive will help turn the page on the tumult unleashed by the arrest of former chief Carlos Ghosn. But the firm still faces plenty of challenges, from naming a successor to Hiroto Saikawa and repairing its alliance with partner Renault, to turning around the firm's finances after a disastrous year.

  • The succession headache. Nissan CEO Saikawa announced on Monday he would be stepping down, after an internal audit launched in the wake of the Ghosn scandal found he benefitted inappropriately from a bonus scheme.

The firm's current chief operating officer Yasuhiro Yamauchi will serve as interim CEO while Nissan searches for a permanent replacement. They hope to name someone by the end of October.

Masakazu Toyoda, head of the firm's nomination committee, said they were looking for someone who could inspire employees at Nissan, which has been buffeted by scandal since Ghosn's shock arrest in November. The firm also wants a candidate with auto industry experience and a "deep understanding" of alliances, a necessary trait for a CEO who will have to navigate Nissan's tricky relationship with French partner Renault.

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Nissan says it has narrowed the field to 10 candidates, among them non-Japanese citizens and - unusually for Japan's male boardrooms - women, but it is believed to favour hiring a Japanese citizen. Mr Yamauchi, 63, is not considered the "new blood" the firm needs and is not believed to be keen on keeping the post.

  • House-cleaning. Mr Saikawa described his resignation as the result in part of the "milestone" of completing the firm's internal audit.

The audit's conclusions focus largely on Ghosn and his former right-hand man Greg Kelly, accusing them of costing the firm at least 35 billion yen (S$450 million) - a figure that includes deferred payments that were never actually made. Ghosn denies any wrongdoing and a statement from his lawyers on Monday accused Nissan of an "inconsistent, contradictory and incoherent" position.

In addition to Ghosn, Kelly and Mr Saikawa, six other senior Nissan officials - some still working at the firm - were found to have improperly received bonuses. Their names have not been made public.

Nissan says the scheme that Mr Saikawa and the other unnamed officials participated in was not illegal, and that the issue is different from what it calls intentional misconduct by Ghosn and Kelly. And it says Mr Saikawa and the other executives will return the money involved.

It is unclear whether the audit would continue, with sources saying some board members want further investigation.

  • Alliances to rebuild. The next CEO of Nissan faces the unenviable task of returning the firm to financial health after it reported its worst first quarter results since the global financial crisis. Whoever succeeds Mr Saikawa will inherit the harsh cost-cutting measures he proposed as a way out of the wilderness, including reducing dealer incentives and promotions but also cutting global production by 10 per cent to 2023, a measure that means the loss of 12,500 jobs.

Then there is the unresolved business of Nissan's fractious alliance with Mitsubishi Motors and Renault.

Renault holds a 43 per cent stake in the Japanese carmaker, which in turn controls 15 per cent of the French firm but has no voting rights.

Sources say various changes to that structure have been proposed, but "nothing is official" yet. AFP