Carlos Ghosn expected to be named chairman of scandal-plagued Mitsubishi Motors

By Sean McLain 

TOKYO -- Nissan Motor Co. Chief Executive Carlos Ghosn is set to become chairman of Mitsubishi Motors Corp., putting him in charge of three automobile makers, said people familiar with the matter.

Osamu Masuko, currently Mitsubishi Motors' chairman, chief executive and president, will relinquish the chairman's title once Nissan acquires a controlling stake in the company. Nissan has asked him to stay on as president, the people said. It was unclear who would hold the CEO's title.

In May, Nissan said it would spend some $2 billion for a 34% stake in Mitsubishi, which is struggling to recover from a scandal in which employees falsified fuel-economy data.

On Wednesday, Mitsubishi cut its sales forecast for the year ending March 2017 and projected a sharply higher loss of Yen240 billion yen ($2.3 billion) for the year owing in part to increased costs from the scandal and slowing sales.

Nissan has said it plans to complete the acquisition of the Mitsubishi stake by the end of the year, making the smaller auto maker part of a global alliance centered around Nissan and Renault SA. Mr. Ghosn also is chief executive of Renault.

Shares in Mitsubishi Motors rose 7.9% in Tokyo on Wednesday to 525 yen, its highest closing since June 23, as investors welcomed the news, earlier reported by Japan's Nikkei newspaper, that Mr. Ghosn would take a central role in guiding the auto maker's recovery.

The Renault-Nissan model is being mimicked by other auto makers eager to share development costs as sales growth slows around the world. Toyota Motor Corp. and Suzuki Motor Corp. last week said they were starting talks on a partnership that would share costs for developing new automotive technologies such as self-driving vehicles.

Analysts have expected Mr. Ghosn to take over the chairman job at Mitsubishi since Nissan disclosed its intention to take a controlling stake in the company. In June, Mr. Ghosn gave up the chairman's role at OAO AvtoVAZ of Russia, which is part of the Renault-Nissan alliance. That could allow him to devote more time to Mitsubishi, said Takaki Nakanishi, a Tokyo-based auto analyst who runs his own research firm.

Mr. Masuko, Mitsubishi's current chairman, previously hinted that Mr. Ghosn would take his spot after the stake sale. He has said that the 17-year-old Renault-Nissan Alliance has succeeded where similar tie-ups failed because the same man was chairman of the two companies.

Mr. Ghosn made his name as a cost-cutter for his efforts at Renault and Nissan to close factories and break up close-knit supplier networks.

At Mitsubishi, he faces a company that has been embroiled in numerous scandals. Outside experts commissioned by the company found a corporate culture that bent the rules to meet unrealistic business targets and a management team disinterested in the more mundane aspects of running of a car company.

Mr. Ghosn must find a way to get customers back into Mitsubishi showrooms after the company temporarily withdrew some models hit by the fuel-economy scandal.

Write to Sean McLain at sean.mclain@wsj.com

(END) Dow Jones Newswires

October 20, 2016 02:48 ET (06:48 GMT)