AD #2481 – Ghosn’s Arrest Is Highly Suspicious, Logano Wins 1st NASCAR Title, Wrangler “Death Wobble” Investigated
November 19th, 2018 at 11:37am
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Runtime: 6:57
0:32 Ghosn Is Goin’
1:01 NHTSA Investigates Jeep Wrangler “Death Wobble”
1:55 Logano Wins First NASCAR Championship
2:54 Mystery Car on Instagram Revealed
3:22 Peugeot Offers Extended 508 In China
3:50 BorgWarner Creates Integrated EV Powertrain
5:08 Ghosn’s Arrest Is Highly Suspicious
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On today’s show…in a stunning development, Nissan CEO Carlos Ghosn was arrested for under reporting his income…Joey Logano wins his first NASCAR Cup Series championship…and why you shouldn’t drive your new Jeep Wrangler over 65 miles-per-hour. All that and more coming right up on Autoline Daily.
This is Autoline Daily the voice of the automotive industry.
GHOSN IS GOIN’
Reports out of Japan this morning say that Carlos Ghosn, the CEO of Nissan, was arrested for under-reporting his income to the Tokyo Stock Exchange. Nissan will fire Ghosn and its only American board member, Greg Kelly. It also accused them both of using company assets. Ghosn will keep his position as the CEO of Renault and Mitsubishi, at least for now. And John will have more to say about this later in the show.
NHTSA INVESTIGATES JEEP WRANGLER “DEATH WOBBLE”
The Jeep Wrangler is able to tackle some of the most extreme off-road obstacles, but apparently, it’s having difficulty with the smallest of bumps on the road. A number of owners of the new Jeep Wrangler JL, complain that the vehicle starts to shake, sometime violently, after hitting a small bump at highway speeds. And it doesn’t go away until the vehicle is slowed to around 50 miles-per-hour. They’re calling it the “death wobble.” But a spokesman for FCA says it’s not a safety issue and can happen to any vehicle with a solid front axle. There have been past reports of the issue cropping up on older Ford pickups and Jeeps and it seems to be more common with modified vehicles. But NHTSA has been looking into recent complaints about the issue. We think it might be wise not to drive it over 65 miles-per-hour.
LOGANO WINS FIRST NASCAR CHAMPIONSHIP
In racing news over the weekend, Joey Logano won the NASCAR race in Homestead-Miami and in doing so, won his first NASCAR Cup Series Championship. He passed Martin Truex with 11 laps left to take the top spot in his Ford. The four championship qualifiers, Logano, Truex, Kevin Harvick and Kyle Busch, finished the race in the top four spots, in that order. So congratulations to Logano for his first championship and congratulations to Ford, which hasn’t won a title since 2004.
Still to come, BorgWarner comes up with a slick powertrain for electric cars.
MYSTERY CAR ON INSTAGRAM REVEALED
Whoops, we told you we would do this last Friday, but we want to announce what was that mystery car we showed on Instagram last week. @laughinglion13 was the first to correctly identify it as the new Kia Rio. But there were a total of 12 people that got it right and a few were eagle-eyed enough to note that it was the 5-door hatchback version. And a big thanks to everyone that had a little fun trying something different with us.
PEUGEOT OFFERS EXTENDED 508 IN CHINA
Peugeot just introduced a long wheelbase version of its 508 sedan in China. The car will be built in the country along with its joint venture partner, Dongfeng, specifically for the Chinese market. In addition to the longer wheelbase, the 508L features more headroom and connected car technology from Chinese tech giant Huawei. The Dongfeng Peugeot 508L will be available in the first quarter of next year.
BORGWARNER CREATES INTEGRATED EV POWERTRAIN
Automotive suppliers are jumping into the EV segment with both feet. It’s one of the reasons why we’re seeing so many EV startups. They can buy EV powertrains from suppliers. And BorgWarner has come up with a slick unit it calls the Integrated Drive Module. It integrates the electric motor, with the power electronics and the transmission into one module. In fact, the power electronics are in a housing that actually doubles as a stressed member of the module. By integrating the power electronics and electric motor, this eliminates a set of cooling hoses, and greatly reduces the number of high-voltage, orange cables. By combining the transmission into the module, BorgWarner has come up with an EV power unit that is stiffer and lighter than those that simply take separate units and bolt them together.
Coming up next, John has something to say about why Carlos Ghosn is going to be fired from Nissan.
GHOSN’S ARREST IS HIGHLY SUSPICIOUS
The reports coming out of Japan that Carlos Ghosn, the CEO of Nissan, was arrested and fired for under-reporting his income to the Tokyo Stock Exchange, are highly suspicious. After all, every year Nissan has to publish what it pays its executives. So his compensation is public knowledge. And even if he did under-report, this sort of thing is generally handled with a fine and a scolding. So what is really going on?
Nissan is deeply resentful that is has to hand over billions of profits to Renault every year. That’s because Renault owns 43% of Nissan, while Nissan only owns 15% of Renault and those shares have no voting power. So Renault runs the show, even though Nissan is bigger and far more profitable.
The French government also owns 15% of Renault and it likes the way things are. It’s been tone deaf to Nissan’s pleas to give it more say in the grand Alliance between Renault, Nissan and Mitsubishi. So now the Japanese have everyone’s attention. Renault also has two French executives on the Nissan board. They better behave like Boy Scouts because the Japanese are going to find every excuse to get rid of them. One thing’s for sure, this boardroom battle is far from over.
But that’s it for today, thanks for watching and please join us again tomorrow.
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Comments (29)
November 19th, 2018 at 12:01 pm
Hi John,
I listened to your take on Nissan-Renault and Ghosn with interest.
It was Ghosn himself who pushed for this Nissan-Renault merger and recently also merged with Mitsubishi (the cars, not all the other far bigger businesses the Mitsu conglomerate is in). But if it was such a lopsided deal against Nissan’s interests, why did nobody object to it then?
I read the article in the news (Detroit news or Det. Free Press)on the web and it was a much bigger thing than just underreporting his income. He had an accomplice named Kelly and they did all kinds of fraudulent activities. Who knows if Ghosn was offered a face-saving way out and, in his extreme arrogance, refused? (remember the late Leona Helmsley? “only the little people pay taxes”.
And anyway, by getting rid of Ghosn and Kelly, what did Nissan accomplish? It will still be subject to the same unfair deal you described. In fact, Ghosn is not even French! He is a Lebanese who immigrated to Brazil! Unless they made him A Naturalized French Citizen, he is a Brazilian.
What we know is that the news resulted in both Renault and Nissan stocks taking a GIGANTIC beating, Nissan fell 14% in Tokyo and Renault 11% in Europe, and that from already depressed prices.
November 19th, 2018 at 12:03 pm
Some of these inside industry diatribes sometimes scrabbles my brain; thanks John for giving me at least some semblance of the situation or possible situation that is about to unfold.
FCA’s explanation of the Jeep Wrangler’s wobble, in my opinion, doesn’t make the cut; and it can be dangerous if it happens. Even if they said they are aggressively investigating the phenomenon and will address the issue would be much more acceptable (and expected).
November 19th, 2018 at 12:12 pm
The “death Wobble” has been around for many years and mainly been blamed on suspension modifications. Which big tires and lift kits will make this vehicle more susceptible to the wobble, but yea its not the sole contributor.
Not sure of the actual numbers, but I’m sure a large percentage of Wranglers get modifications. Kind of surprised Jeep hasn’t gone to independent front suspension like on their Cherokee’s. Depending on the results of this investigation you can bet Jeep gets rid of the solid front axle.
November 19th, 2018 at 12:13 pm
My JK Wrangler had developed a progressively worse death wobble after lifting it 2.5″ and putting bigger tires on. I figured out how to fix it and made a video about it last year. The fix is the bolt diameter, at least it is for the JK… https://youtu.be/UDk1drw7UtU
November 19th, 2018 at 12:15 pm
The bolt diameter of the trackbar to be more precise. Replace the 14mm stock bolts with 9/16″ bolts. Amazon sells a kit with the proper size. https://amzn.to/2EKLWrE
November 19th, 2018 at 12:22 pm
Good Job BorgWarner on integrating the EV powertrain. Reducing parts and complexity will certainly make it more affordable. Service? Probably not.
So as other players start developing transmissions like BorgWarner does this mean they might develop a standard bolt pattern so it can fit any makers engine? Or will they still have to make it manufacturer specific? Would be nice if they could even get it down to just swapping the bell housing to fit a particular brand motor.
November 19th, 2018 at 12:23 pm
John I don’t have any personal position on the Nissan-Renault saga, but the deal was made when Nissan was all but bankrupt. If Nissan disliked the deal they had the choice to pass on it. They didn’t and took the only option that existed to remain a viable entity even if it was not quite what they were most happy about. Reading the details in the WSJ and other press it looks like Ghosn and Kelley did was sort of tax evasion and/or some other almost fraudulent thing. I don’t feel bad if people who make many, many millions of dollars a year are held accountable to the same standards as you and I.
If I’m wrong about this I’ll be happy to apologize…
November 19th, 2018 at 1:01 pm
#1, #8. Nissan was going bankrupt when Renault bought a big chunk of the company and saved it. No doubt there were plenty of people at Nissan who objected to the deal, but they had no choice. It was take the deal on the table or go out of business.
Over the years Nissan tried to address the imbalance, but always got stiff armed by Renault and the French government. Only Ghosn prevented open warfare and now he’s gone.
Make no mistake, Ghosn considers himself French, not Lebanese or Brazilian. I know this because he told me so when I asked him about it.
November 19th, 2018 at 1:06 pm
I experienced the death wobble on an older Jeep many years back. Scary as hell, when it happens. Nothing you can do but slow down and hope for the best.
November 19th, 2018 at 1:13 pm
I feel I have been vindicated by Christian Spencer of Nissan, the guest on last week’s AAH.
Christian indicated that there are opportunities to increase sedan sales by incorporating AWD!
November 19th, 2018 at 1:17 pm
Congrats to Joey Logano and his team on his first NASCAR Cup Series Championship! The people at Ford must also be very happy about his win.
November 19th, 2018 at 1:19 pm
8 Thanks for the further details, John. BTW they accuse him of hiding $44 million of his income (no small change) in addition to misappropriating company funds etc. over a period of 5 or so years they have been investigating him.
November 19th, 2018 at 1:20 pm
One thing is very surprising to me in this affair, when Nissan was going broke, how come the Japanese Government, who used to meddle in industry affairs all the time, did not bail them out, but they had to make that ‘pact with the (French) Devils”?
November 19th, 2018 at 1:24 pm
I know the perfect new job for Carlos Ghosn.
He could take over the reins at Ford! Nissan and the Japanese Government better watch their next step since if Ford and VW take this suggestion seriously and combine their resources they could put a serious hurt on Nissan IHMO.
November 19th, 2018 at 1:58 pm
14 Perfect for Ghosn, perhaps, not for Ford.
November 19th, 2018 at 2:55 pm
Ghosn will probably go into politics, like a certain Medicare fraud crook who became governor of Florida, and will now be a senator from Florida.
November 19th, 2018 at 3:16 pm
16 Let me take a wild guess, this new senator is a Repub? The last people on Earth that can legitimately call anybody else a crook are the Dems. They will do everything to get elected, the Chigago DALEY machine was world famous, for decades. The refusal of the dems to ask for a PHOTO ID to vote is absolutely disgusting and betrays their crookedness. I could go on and on for days here, but it is not the right site. BTW, you should have informed the voters of your allegations BEFORE the Vote, and NOT after the RECOUNT ws not in your candidate’s favor.
PS 15, FOrd DID try a CEO with an Arab-French Background before, has everybody forgot the DISASTROUS Jacques Nasser? He was one of the WORST Ford CEOS ever in the 90s, he should take credit for ruining the Taurus in its second, catfish-like oval generation.
November 19th, 2018 at 3:16 pm
death wobble? where is Ralph Nader when you need him?
November 19th, 2018 at 3:32 pm
17 Here is one of many articles about what I was referring to
https://www.sun-sentinel.com/opinion/fl-op-col-rick-scott-medicare-fraud-20181002-story.html
November 19th, 2018 at 3:33 pm
17- and that last outburst has been brought to you by right wing nuts!, right wing nuts, they will suck the fun out of everything.
November 19th, 2018 at 4:14 pm
All – Before the moderators have to step in, I would suggest leaving political subject matter off this forum. We generate enough disagreements on automotive topics. Besides, all politicians are crooks – enough said.
November 19th, 2018 at 4:32 pm
21 Sorry about that. That particular case came to mind, in that a crook running a big business, and forced out, went into politics successfully. Voters might, or might not care more about such things in other parts of the world, like France, or wherever Ghosn calls home. Anyway, I’ll try harder to avoid such topics.
November 19th, 2018 at 5:40 pm
John,
Thanks so much for your take on the Carlos Ghosn story! The news media that I’ve listened to did not go into the background of the 3 cars alliances. This is why we need you to keep us up on what’s really happening.
Thanks for all your insight!
November 19th, 2018 at 5:54 pm
Read about Ed Deming & his time w/the floundering jap auto industry in the late 40′s
November 19th, 2018 at 6:01 pm
24 Yep, the Japanese companies used Deming’s philosophy, while the U.S. companies ignored it. Is that why Toyota is now the most successful car company in the world, by most measures?
November 20th, 2018 at 9:26 am
Lots of new stories about Ghosn and his misdeeds in the last 24 hours.
Even if Ghosn, born in Brazil of Lebanese parents (both) considers himself a… Frenchman, France is not supporting him much, it seems.
He could face up to 10 years in Jail, and according to Japanese law he may be held for up to 26 days before being charged.
More charges claim that Ghosn took money supposed to fund upstart ventures and used it to… buy real estate.
The big question is what will happen to the pitiful alliance and its unfavorable terms for Nissan. Will there just be a new CEO, will they renegotiate the deal, or will they scrap the whole thing?
Bob Lutz made some comments about arrogant CEOs (when asked about Ghosn) that made a lot of sense to me.
Ghosn was known as “Le Cost Cutter”. maybe he insisted they call him that, as it is obvious how much he liked to be mistaken for a French Guy. This cutting of corners with the excuse of cost saving may also explain the poor quality of recent Nissans.
IMHO always, if Nissan and Renault (despite Renault’s possibly impressive early 20th cent. history) were to disappear from the Automotive Business, there would not be a lot of lamentation around, as the average quality of new cars sold would skyrocket without them.
November 20th, 2018 at 9:55 am
There are quite a few Nissans in my area, but I don’t personally know anyone who has one.
A big negative I heard a few years ago on a south Florida call-in radio show, was that it took two or three shop hours to change a headlight bulb in one generation of Altima. It takes about 30 seconds to change one in my 1989 Caravan.
November 20th, 2018 at 11:17 am
That is a travesty (change of headlight) and it is all too common; some Cadillac require the removal of the front valence to access the headlamps. Simple services, some of which include bulb changes, oil changes and even the ability to check your transmission fluid, is almost criminal (what some manufacturer’s have done to entice patrons to bring their cars into the dealership for service). Wonder if there is any collusion between the dealers and manufacturer’s; and have you seen some of the fasteners used (requiring special tools, when a phillips, torx or flat-blade would do). It’s a conspiracy I tell you, a conspiracy.
November 26th, 2018 at 12:15 am
Good Job BorgWarner on integrating the EV powertrain. Reducing parts and complexity will certainly make it more affordable. Service?