TOKYO – It was 2011, and Carlos Ghosn was preparing his car industry empire for his most ambitious phase yet. Under his plan, within five years, one in every 12 cars sold around the world would be made by Nissan of Japan . To achieve this goal and cut costs relentlessly, he said Nissan had to work closely with Renault, the French machine he also controlled.
Some people on Nissan suspected another motive. Engineers at Nissan and Renault began receiving less money to develop separate models. In reality, they were forced to work together. Nissan insiders worried that Mr. Ghosn was gently trying to melt the Japanese company to the French.
But dare to oppose or argue doubt about a possible merger. Mr. Ghosn was, as a critical governance report revealed this week, "deified within Nissan", a leader whose decisions and activities were "considered impenetrable territory in the company." He was known to drive out leaders who disagreed with him. He shared authority – and his plans – with just a few loyal leaders.
Today, Mr. Ghosn meets charges of financial misconduct after being forced out of the company and the tensions in Nissan and over the alliance are blue open.
The full story of what fell out Mr. Ghosnos' oyster could show up in the coming months as he and a top aide, Greg Kelly, are in the trial in Japan. But it is becoming increasingly apparent that his fall occurred in a deeply divided and fractional group of corporate executives. His cleansing from Nissan and its partners has turned off the unit's veneer of what had been a model alliance.
The question now – for Nissan, Renault, governments in Japan and France and more than 450,000  employees in one of the world's largest automotive empires – is whether the rifts are too deep to repair. The Alliance, which grew to include Mitsubishi Motors in 2016, had been a case study of innovation in the era of globalization, a seamless message of different cultures through the sharing of technical knowledge.
"I felt that in the hallways there were people who were worried," Johan De Nysschen, a former Nissan senior vice president and chief of the company's luxury Infiniti division. "
Part of the division was promoted by Mr. Ghosn himself in interviews . The result was a toothless board, internal guard dogs without the authority to investigate senior executives, and according to Nissan's new leaders and former employees an imperial business leader
The environment was ripe for repurchase – and now Mr. Ghosn has said that is exactly what happened to him . In an interview with Nikkei news service while being held in a prison in Tokyo, he said "plot and betrayal" by Nissan leaders worried that he planned to form closer ties between the company and Renault.
"People strongly translated leadership into dictator, to distort reality , "he said," for the purpose of getting rid of me. "
Mr. Ghosn built this cross-border enterprise. Someone else will have to save it.
" Attempting to remove it would be a nightmare, " C arla Bailo a former Nissan leader who spent 25 years at the company and now heads the Center for Automotive Research, a Michigan think tank . "But without a strong person leading both companies, some items may fall apart."
An Unhappy "Couple"
He also provoked concerns, both inside and outside the car manufacturer, that he made the Japanese company a French one.
Renault had acquired a 36 percent stake in Nissan in 1999, and Ghosn realized early on that he could cut costs on both companies by sharing suppliers and design expertise. As a result, the young Japanese government officials and the public blunted that he was trying to pillar the country's industrial skill into a vassal of France .
Herr. Ghosn emphasized that Nissan and Renault were respected partners and that the event did not, like it was sometimes criticized in Japan, enjoy a parenting relationship.
"As with a couple, there must be a clear definition of the rules and great attention to the other partner," he wrote in a 2007 Nissan Recovery Book. "The Alliance is progressing because it respects individual and cultural identities."
But the automotive industry shifted. The US and Chinese market grew more competitively . Sales in Europe had shifted to slow equipment, more recently, car manufacturers have had to invest in new technologies such as electric vehicles and self-propelled cars, partly because global tech companies are quickly boring into the market, Mr. Ghosn justified a more streamlined alliance was the only way to continue to dominate world car sales .
As of 2011, when Mr. Ghosn outlined brave expansion plans For the Nissan-Renault Alliance, he had begun to bring the two companies closer together, said former leaders.
His Budgets – With Expenditure Reductions of 5 per cent a year – forced integration into design and engineering. Mr. Ghosn also began to name leaders who were responsible to the alliance.
The digits between Nissan and Renault began to blur then to the top Japanese leaders.
"The engine," said Tetsuji Isozaki, a former association leader who worked on Nissan's engine development team and is now a member of the Japanese parliament, describing how the extermination began . "Then the transfer. Then the next and then the next, until it came to a place where the car's identity was at stake. Someone began to ask," Isn't it too far? ""
In 2015, then the French government strengthened its influence over Renault by increasing its stake in the company to nearly 20 percent from 15 percent, the bounce balked . The Japanese company only relented after Renault agreed on a common statue t where it promised not to interfere in Nissan's affairs.
"A sense of urgency began to grow from that time," Isozaki said.
Nevertheless, Mr. Ghosn faced little internal opposition, the former employees said. Partly they said it was by design.
"He made sure all parts of the organization depended on him to work," said Takeshi Yamagiwa, a business consultant in Tokyo who spent three decades at Nissan, where he led vehicle development. "It came to a point where just one clone of Mr. Ghosn could succeed with him. "
& # 39; They weren't friendly & # 39;
Behind the scenes, Ghosn fostered rivalry among leaders and sidelines who opposed Han said the former employees.
At the height of the global financial crisis in early 2009, he moved to cancel annually our employment of new college graduates, a sacrosanct rite of passage in Japan. Nissan's Chief of Staff Hitoshi Kawaguchi claimed that the savings measure would destroy the lives of hundreds of young people, according to a person with knowledge of the incident
Months later, the Nissan boss moved Mr. Kawaguchi from the job that led the company's 160,000 employees workforce to overseeing intangible and external affairs. In his place, Mr. Ghosn promoted Mr. Kelly, who became a trusted lieutenant. Some Nissan leaders thought Mr. Kawaguchi was being punished.
In a report released on Wednesday, a panel convened by Nissan said to investigate corporate governance, that Mr. Ghosn had little disagreement from board members or auditors. Those who disagreed with him were summoned later to meet him, it said. He "seen the performance goals substantially by himself" and "succeeded in making certain administrative departments opaque", the report said.
. He disliked having questions or opinions raised at board meetings – and such averages lasted 20 minutes. "Finally," said the report, "board meetings were not a robust debate environment."
In a statement, a spokesman for the Ghosn report called "part of an indefinite butter campaign against Carlos Ghosn to prevent the integration of the alliance and hide Nissan's aggravating performance."
Mr. Ghosn largely acted on the members of the Nissan government, with shareholder approval. The board, which included eight men and one woman over the last couple of years, was in the process of professional excitement. Among them were two Nissan aliens, Hiroto Saikawa and Toshiyuki Shiga, who competed for Mr. Ghosn's favor after they both joined the board in 2005 .
An intensely private graduate of prestigious Tokyo University Saikawa said a strong reputation as the leader of Nissan's powerful purchasing department. In the mid-1990s, he had been head of Nissan's former president Yoshifumi Tsuji before going to Europe to help throw up the automaker's foreign operations.
As Nissan's turn in high gear in the 2000s, Mr. Ghosn reached out of the hierarchy to make Mr. Shiga his No. 2. Unlike the more polished Mr. Saikawa, Mr. Shiga had spent his formative year at a second-level prefectural college in the port city of Osaka before cutting his professional teeth at Nissan's definite recreational craft business .
The Gregorian Mr. Shiga had a reputation for being a skilled salesman. He was considered a counterweight to promotion to Mr. Saikawa, former leaders said. Both were born in 1953 – a year before Ghosn – and viewed as direct competitors for the top job.
" They came up as complete contradictions to each other, and they were not friendly," Takeshi Isayama said. , a former top trader with the Japanese government and vice president of Nissan.
In 2013, Mr. Ghosn effectively democratized Mr. Shiga for disappointing results and replaced him with Mr. Saikawa. The tensions between Mr. Shiga and Mr. Saikawa were a factor in how the board discussed issues and interaction with Mr. Ghosn, according to people familiar with Nissan's management decisions.
Other board members in 2018 included Hideyuki Sakamoto, a former Nissan practitioner, and Masakazu Toyoda, a former government trade officer. The only woman, Keiko Ihara, had an economics degree but was better known as a racing car driver. The non-Japanese directors were Mr. Ghosn, Mr. Kelly and two former Renault leaders. One of the Renault leaders was considered an external director.
Former Nissan leaders say the board deserved some guilt for a corporate culture that could not keep Mr. Ghosn in check.
Mr. Saikawa and Mr. Shiga had "some responsibility in all this," said Isayama, the former Nissan Deputy, in an interview. "First, by letting Mr. Ghosn gather so much power and then not be able to do it."
Controls and Imbalances
When Mr. Ghosn was arrested, Nissan found the board at about the same time as everyone else.
Last year, according to Nissan, whistleblowers found evidence of injustice from Mr. Ghosn and took their findings to former prosecutors. The former prosecutors took the findings of current prosecutors in Tokyo, who asked for silence while building a case. Mr. Saikawa has said that he learned from the survey in October, well after it had begun.
The experts in corporate governance said that series of events described by Nissan were sharply different from those typical of companies in Japan. One of the people involved in Nissan's internal in survey was a leader in a position that instructed him to inform the board of what he found, according to two people with knowledge of the events.
The executive was Hidetoshi Imazu, Nissan's accountant. In Japan, the auditor is appointed by a company's shareholders to monitor the board. The responsibility is different from an external auditor or the board's audit committee. Mr. Imazu, who was appointed to the position in 2014 is another long-term Nissan leader. He is dignified in the company to pioneer his entry in the United States in the 1980s.
Mr. Imazu, who works with whistleblowers whose names have not been published, helped prepare an internal report that first went to former prosecutors, according to the two peoples familiar with the events of questions. Mr. Imazu's role has been reported extensively in Japanese media.
"I have never heard of a case where the auditor will notify law enforcement even before the board," said Masahito Nagata, chief executive of a nationwide organization of statutory auditors in Japan . "It is the auditor's basic duty to report to the board." Nissan refused to make Mr. Imazu available for questions.
It was not the only time Nissan's internal system of control and balance deviation from the norm.  MR. Ghosn installed an internal audit team in the early 2000s which was intended to raise red flags over possible breaches or breaches of employees. However, the auditors had little authority to investigate senior management's, according to the former employee . Mr. Ghosn's financial affairs would have been outside the group's task, which included around 15 employees at Nissan's headquarters in Yokohama, the former employee said.
The steering report released Wednesday said that Mr. Ghosn would not reconsider auditors that panel members were described as "fastidious."
Further limiting control at the company was Nissan's financial affairs monitored by a number of people with cozy relationships with the management. Two of Nissan's external auditors – non-employees who were committed to overseeing the company's directors – were former financial institution leaders who had active relationships with Nissan.
Nissan's external auditors, Ernst & Young ShinNihon, also had unusually tight ties with the company. An accountant who has long dealt with Nissan's books is now a statutory auditor of a Nissan Foundation.
Ernst & Young refused to comment on the event or relationship with Mr. Ghosn.
Despite these weaknesses, it is not clear that Mr. Ghosn used them to reap the wrong personal gains. In its government report, the panel looking at Nissan's problems confirmed that Mr. Saikawa, current CEO and now Mr. Ghosn's most prominent critic, had signed at least some of the compensation agreement in the center of the predecessor's confusion.
A Fractured Alliance
Nissan and Renault are now looking for ways to keep their alliance together. With Mr. Ghosn out, and the alliance tensions were taken, the prospects are uncertain.
In March, new leaders at Renault, Nissan and Mitsubishi met in Tokyo to announce a renewed alliance governance structure. It requires Renault to get two seats on a new, four-person board; Nissan and Mitsubishi will each get a board seat . Essentially, the French and Japanese pages will have the same.
Renault has announced a review of a sponsorship agreement with the French Palace of Versailles to determine whether Mr. Ghosn used the premises inappropriate for a personal party – a splashy wedding reception – in 2017.
But Renault and the French government has mostly focused on discussing the next phase of the alliance. Renault has publicly questioned how Nissan has handled the survey, but it needs the Japanese company's low cost to cope with the mature European market.
Nissan, which has factories in the US and elsewhere around the world, must find a way to navigate a tougher global car market while managing full relationships with its French partner. Still, it has participated in a steady PR effort to portray Mr. Ghosn in a bright light.
At Mr. Ghosn's 100th day in prison, Saikawa said in an interview with Nikkei Asia Review that he regretted that Nissan had not paid "closer attention to corporate governance." The person who was most wrong, he said, was Mr. Ghosn.
Herr. Saikawa said Nissan had "total dependence" on Mr. Ghosn before he was arrested. "It wasn't that the board wasn't aware of it, but we couldn't know," Saikawa said.
Eight days later, Ghosn was out of jail, released on citizen through the efforts of a new legal team. He gave no interviews, but indicated that the energy he once used on the alliance would be directed to Nissan.
"I am innocent," he said in a statement, "and utterly obliged to vigorously defend myself in a fair trial against these merciless and unfounded accusations."