If you liked Ocean’s Eleven, you are really going to like the movie they make about Carlos Ghosn. There isn’t any official word — yet — but there is no way a movie doesn’t happen.
The true-life story of how Carlos Ghosn escaped house arrest in Japan, and the events that played out to make it happen, read like a Steven Soderbergh script.
In some ways, the tale makes Ocean’s Eleven look tame.
And the story isn’t over yet, because the international reputation and dignity of not just Ghosn the man but a global corporation, Nissan, and the entire Japanese criminal justice system are now on the line.
It’s hard to sum up the wildness of this story. But here is a compressed version of what’s happened so far.
For decades, Carlos Ghosn was one of the most powerful CEOs in the corporate world. He began his career as an engineer at Michelin, a tire maker, and then took the reins of Renault, a struggling French car company, in 1996.
Ghosn then saved Renault by restructuring the entire company, with a heavy emphasis on eliminating waste and slashing costs — so much so his nickname became “Le Cost Cutter.”
In 1999, a newly healthy Renault swooped in to save Nissan, a struggling Japanese automaker, and “Le Cost Cutter” worked his magic again, eliminating 22,000 jobs, closing factories, and restructuring Nissan top to bottom in just three years.
At the turn of the millennium, Carlos Ghosn was the man who had saved not one but two car companies, and had even become a national hero in Japan. He was so revered in Japanese business culture, he even inspired a manga — a popular type of Japanese comic book — depicting a hero business leader who saves companies.
Over the decades, Ghosn ran Renault, Nissan, and later a third alliance partner, Mitsubishi, all at the same time, constantly trotting the globe in his private jet.
Some saw Ghosn as the gold standard for a hyper-productive international chief executive. Others saw him as the ultimate imperial CEO, a business leader who came to treat himself like an emperor.
After many years, Ghosn’s hero reputation faded within Nissan’s executive ranks, and resentment started building up over his imperious ways.
Ghosn maintains that, ultimately, the higher-ups at Nissan did not want to allow a full takeover from Renault — and so they ultimately decided to frame Ghosn to get rid of him, with the implicit help of the Japanese media and the Japanese criminal justice system.
The criminal case is complex — it involves a lot of executive compensation decisions, made when Ghosn was CEO — but the point Ghosn made in justifying his escape was the rank unfairness of the Japanese system.
Shortly after fleeing Japan, Ghosn held a multi-hour press conference to argue for his innocence. He explained that he was unable to hold a press conference while still in Japan because, if he tried to speak to the media, Japanese prosecutors would throw him back in “the pig box.”
“The pig box” was Ghosn’s term for the tiny cell where he was held in solitary confinement. The cell had only a tiny window and hardly any room to move. While in the cell, Ghosn was only allowed to shower twice a week, he was not allowed to have visitors, and prosecutors questioned him for eight hours a day with no legal counsel present.
Ghosn said a lot of the questioning consisted of prosecutors shouting at him over and over, saying that if only he would confess, the confinement would be over and he could go free. He was later moved to house arrest, but Ghosn knew he had to keep his mouth shut — or he would get the pig box again.
Ghosn’s tale of his experience is alarming because of some corroborating facts. For example, the Japanese criminal justice system has a conviction rate of 99.4%. That is not a typo. If you face trial in a Japanese court, you are going to jail.
A conviction rate of 99.4% is alarming on its face because of simple mathematics. There is no way an impartial justice system should have a conviction rate that high — unless they restricted all prosecutions to criminals who were literally caught red-handed in the act, letting everyone else avoid trial.
And even then, 99.4% would still be too high to be plausible.
Worse still, in Japan, prosecutors can arrest a defendant prior to trial, hold him in the type of confinement Ghosn described, and then, after a period of weeks, turn around and arrest the defendant again. The system is set up so that, if the prosecutors wish, a form of solitary confinement without trial can go on almost indefinitely.
Ghosn believed, with a fair degree of evidence to back his view, that the whole Japanese system had been rigged against him, with Nissan executives in league with Japanese prosecutors. This hunch was also backed up by a constant stream of leaks from prosecutors to the Japanese press (communication that was not supposed to happen).
So, rather than face a possible sham trial in Japan, Ghosn began planning his escape.
And what a plan! This is where all the Ocean’s Eleven stuff comes in.
While awaiting trial under house arrest, Ghosn spent millions of dollars architecting a grand escape. At one point, his planning team included an international cast of 10 to 15 people, according to the Wall Street Journal.
The escape plan appears to have been masterminded by Michael Taylor, a 59-year-old ex-Special Forces soldier and Green Beret. Taylor’s past resume included rescuing hostage victims for the U.S. State Department and FBI. In 2009, the New York Times hired Taylor to help rescue a reporter from the Taliban.
With Taylor in the lead, Ghosn’s personal escape force wound up making dozens of trips to Dubai and Japan, looking at possible escape routes. They considered at least 10 different Japanese airports, and also looked at boat possibilities and other means of smuggling Ghosn out of the country.
During the planning process, Ghosn was unable to communicate using normal electronic media, given his house arrest and surveillance. So they communicated with an elaborate system of human messenger go-betweens, like old-school spies in a 1960s Cold War novel.
Ultimately, Ghosn’s escape team found a small private airport, Kansai International Airport in Osaka, where conditions were perfect. The airport was sleepy and out of the way — crucial to avoid attention — but most importantly, the airport’s x-ray machine was too small to run large items through, and the laid-back staffers were known to let large containers wave through the system unchecked.
To get Ghosn out of Japan, they put him in a giant black case designed to hold musical equipment, with breathing holes drilled in the bottom of the box. (To get to the box, Ghosn slipped out of the house when his watchers weren’t paying close attention, and took a taxi to a hotel where the team was waiting.)
At the private airport, the box bypassed the x-ray because it was too big to fit in the machine — just as the team anticipated — and then, also as they anticipated, relaxed staffers waved the box through without checking the contents.
Taylor and another accomplice then loaded the private jet they had chartered with a decoy box, containing actual musical equipment, in case anyone wanted to look inside at the last minute. Then they snuck the box containing Ghosn into the back of the plane.
From there, the jet flew to Istanbul, where Ghosn emerged to get on another plane a few hundred yards away. The second plane flew Ghosn to Lebanon, his home country, which (crucially) does not have an extradition treaty with Japan.
Now, free of solitary confinement and the threat of being muzzled, Ghosn is able to wage a publicity war to argue for his innocence. He already has powerful support — the Wall Street Journal editorial board published a piece saying that, given the balance of facts already revealed, they believe Ghosn is innocent.
Next up, it will be fascinating to see what happens to Nissan when further scrutiny is applied to Ghosn’s claims of being framed — and furthermore what happens when a global spotlight is applied to the Japanese criminal justice system.
The story is far from over, and the yet-to-come fallout for Japan could be huge.
Meanwhile, in Lebanon, Ghosn is reportedly living in a pink mansion owned by Nissan, purchased when he was still in good standing as Nissan’s CEO — and Nissan can’t kick him out until the legalities of the situation are resolved.
Again, the story is going to make one heck of a movie. And it demonstrates in larger-than-life terms why the market itself is about so much more than numbers and projections and dry financial statements. Financial markets are often driven by drama, and passion, and people.
TradeSmith Research Team