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Nissan's Ghosn crisis

Ghosn's fall clouds outlook for Mitsubishi's recovery

Automaker still relies on alliance with Nissan and Renault

The triple alliance with Renault and Nissan Motor has greatly helped Mitsubishi Motors recover from a damaging fuel-efficiency scandal in 2016.   © Reuters

TOKYO -- Tensions between Nissan Motor and Renault following alliance leader Carlos Ghosn's arrest threaten the rehabilitation plans of junior partner Mitsubishi Motors, which relies heavily on cooperation with the other two automakers in product development and procurement.

Mitsubishi's board on Monday voted unanimously to fire Ghosn as chairman and representative director, following similar action by Nissan last week.

Ghosn "could no longer fulfill his responsibilities at Mitsubishi Motors," CEO Osamu Masuko, who was named interim chair, told reporters that day.

Masuko also said he will meet with Nissan and Renault representatives later this week and "wants to take the time to discuss the future" of their alliance.

Ghosn was arrested Nov. 19 on suspicion of underreporting his income at Nissan. Mitsubishi has begun an investigation to determine whether similar misconduct occurred inside its own company, and the automaker is considering creating a new compensation committee.

Mitsubishi joined the alliance in October 2016, when Japanese compatriot Nissan bought a 34% stake and essentially bailed out the automaker reeling from a fuel efficiency scandal. Mitsubishi booked a net loss of 198.5 billion yen ($1.75 billion at current rates) that fiscal year, but now expects a 110 billion yen net profit for the 12 months ending in March.

"We are in the final stages of recovery," a Mitsubishi official said.

But the automaker is much smaller than its two partners. Mitsubishi sold about 1.03 million vehicles worldwide in 2017, just 9% of the alliance's total. The company still needs the resources of Nissan and France's Renault to fully regain its feet.

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