Carlos Ghosn: From auto industry icon to scandal
By ELAINE GANLEY
Monday, November 26
PARIS (AP) — A trailblazer and visionary in the auto industry, Carlos Ghosn is also a highflyer prone to excesses that may have helped bring on his surprise downfall as head of the world’s best-selling auto group.
Ghosn turned around France’s Renault SA and then Japan’s Nissan Motor Co., eventually linking them in an alliance with Mitsubishi Motor Corp. in their top-selling venture.
But while renowned as an industry cost cutter, he spent lavishly on himself, thanks to multi-million-dollar salaries from the three companies. Ghosn’s October 2016 wedding to his second wife at the Grand Trianon in Versailles, once favored by Marie Antoinette, featured actors in 18th century attire, a towering wedding cake and mounds of treats.
Like the queen, the man once seen as a king among industry executives in France and Japan has flashed out like a dying star.
Ghosn, 64, was arrested on Nov. 19 in Japan for allegedly falsifying his financial reports and misusing funds at Nissan. Prosecutors say he is suspected of underreporting his income by $44 million over five years. He now sits in spartan conditions in a detention center that also holds death row inmates and recently hanged doomsday cult leader Shoko Asahara.
No charges have been brought yet and Ghosn has made no public comment about the case, but last week Nissan’s board unanimously vote to end his 19-year reign as chairman. The board of Renault voted to keep him as CEO, pending evidence on the case, but appointed a temporary replacement.
Mitsubishi Motors’ board fired Ghosn on Monday, also by a unanimous decision. Its CEO, Osamu Masuko, will serve as interim chairman pending a general shareholders’ meeting.
Ghosn is admired in Japan for bringing Nissan back from the brink of bankruptcy but feared for his “cost killer” ways. He started out at Nissan by axing thousands of jobs and closing plants in a country loath to give up lifetime employment.
Over nearly two decades, Ghosn shook up Nissan’s hidebound corporate culture, empowering women in managerial roles and enlivening its car design and marketing. He put a stop to paying off extortionate stockholder gangsters, known as “sokaiya,” a courageous move that meant he needed extra security.
Taking home a salary several times that of rival Toyota Motor Corp.’s chairman, Ghosn stood out in a nation of “salaryman” presidents, even at top companies, who earn relatively modest salaries. Signaling his status as an icon, he’s the star of a manga, or Japanese comic book.
Nissan managers credited Ghosn with working hard, listening and guiding staff to carry out well-defined goals. He made a point of showing respect to Japanese culture, posing in kimono, visiting factory floors and eating noodles at company cafeterias.
But he also spent much time zipping by private jet through time zones and cultures, frequenting high-profile events like the annual hide-away of the world’s elite in Davos, Switzerland, the red-carpet at the Cannes Film Festival, and Paris couture shows.
His business acumen and his celebrity brought him rock star status at auto shows. One employee, who spoke only on condition of anonymity amid the investigation, described Ghosn as a great boss: precise, communicative and even-tempered with a sense of humor. But he also stirred resentment within Nissan’s ranks, the employee said.
Allegations against Ghosn reported in the Japanese media, but unconfirmed, suggest he spent Nissan funds on fancy homes in Paris, Beirut, Rio de Janiero and Amsterdam, and on family vacations and other personal expenses.
Nissan’s CEO Hiroto Saikawa portrayed his boss’s suspected misconduct as a betrayal, saying he had too much power and was given too much credit for Nissan’s success.
“It’s hard to put into words, but what I feel goes far beyond remorse to outrage,” Saikawa told reporters the evening after Ghosn’s arrest.
Born in Brazil, where his Lebanese grandfather had sought his fortune, Ghosn returned to Beirut as a child. A Maronite Christian, he received a rigorous Jesuit education, then took off for France and higher studies at the elite Ecole Polytechnique and Ecole des Mines.
He got his start in the auto industry working with tires. By his mid-20s, Ghosn was running a Michelin factory in central France before taking charge of the company’s South American operations in Brazil. He was CEO of Michelin’s North American operations, based in the U.S., before moving to Renault SA.
In 2006, Britain gave him an honorary knighthood. Lebanon, fiercely proud of his success, issued a commemorative post stamp with his likeness last year. In France, where the government has a stake in Renault, he has often met with top leaders.
Ghosn has long credited his success to his multicultural origins and a permanent “outsider” identity that freed him to break with tradition: A 2003 autobiography, one of his several books, is titled “Citoyen du Monde,” or “Citizen of the World.”
“It helps to come from the outside because people don’t see you as anybody involved in past decision-making,” Ghosn said in a 2005 interview with The Associated Press. “It helps when the company is in crisis.”
With so little information disclosed as prosecutors question Ghosn and decide whether to indict him, some believe the scandal partly results from friction between Renault and Nissan: some French media have suggested Ghosn’s arrest was a setup led by Saikawa.
The French government has expressed concern about the future of the Renault-Nissan alliance, which it wants to deepen.
With the alliance leading industry sales, it would be tragic if the unfolding scandal undermines Ghosn’s legacy of diversity and globalization, said Janet Lewis, managing director and Asia head of industrial research at Macquarie Capital Securities in Tokyo.
“He did things that were very hard for somebody internal to have done,” she said. “Given the multinational nature of the senior management team at Nissan, which I actually admire a lot, I think he probably did a pretty good job of getting people of very different backgrounds working together.”
Yuri Kageyama in Tokyo, Elaine Kurtenbach in Bangkok and Zeina Karam in Beirut contributed to this report.
OHIO DEPARTMENT OF AGRICULTURE ANNOUNCES 2019 FUNDING FOR LOCAL AGRICULTURAL EASEMENT PURCHASE PROGRAM
REYNOLDSBURG, OH (Nov. 20, 2018) – The Ohio Department of Agriculture today announced that eight land trusts, four counties and 15 Soil and Water Conservation Districts will receive funding to help preserve farmland across the state. These organizations will receive allocations from the Clean Ohio Fund to select, close and monitor easements under the Local Agricultural Easement Purchase Program (LAEPP).
LAEPP sponsor organizations will accept applications from Ohio landowners interested in selling an agricultural easement on their farms. A total of nearly $8.5 million will be made available in this funding round. Local sponsors have been certified to accept applications in 34 counties. Interested landowners should contact the certified local sponsor in their county for application details.
The program allows landowners to voluntarily sell easements on their farms to the state of Ohio. The easement requires the farm remain permanently in agriculture production. Selected farms must be 40 acres or more, actively engaged in farming, participate in the Current Agricultural Use Valuation program, demonstrate good stewardship of the land, have the support of their local government and not lay directly in the path of development. Landowners may use the proceeds of the easement in any way they wish, but most reinvest it in their farm operations.
Funding for the program is derived from the Clean Ohio Conservation Fund, approved by voters in 2008. When combined with easements from all programs, 449 family farms in 59 counties have collectively preserved more than 73,500 acres in agricultural production. For more information on Ohio’s farmland preservation effort visit: www.agri.ohio.gov/wps/portal/gov/oda/programs/farmland-preservation-office.
Opinion: Inverse Condemnation Hurts California Utilities
By Jay Rhame
Contrary to public opinion, some dreams don’t die with one stroke of the pen but are the result of many small decisions that seem to make sense in the moment.
Legislators need to act boldly to assure stability for long range planning in the electric power industry, or Californians will pay a very high price indeed.
With the September California legislative session wrapped up, it looks as if utilities will be able to access the capital markets to cover extensive fire damages and remain financially workable. In other words: The California utility industry, though threatened by wildfires, remains standing. But dense smoke fogs the investment horizon, and that’s the real problem.
Details about how much of the damages will ultimately be absorbed by shareholders is yet unknown. Little doubt remains that the number will be substantial. Wildfires, in 2017 alone, left an estimated $9.5 billion in insurance claims in Northern California, and an additional $2.1 billion in Southern California. How long it takes for the California legislature to substantively address the long-term problem and, ultimately, how it chooses to address the damages for 2017, this year and in future years, will have a very real effect on the shape of that state’s utility industry for decades to come.
One thing is for sure; the uncertainty in contending with these charges makes it ever more difficult to plan for long-term investing; so much so that the delay may well threaten the dream of shifting to renewable energy sources by 2045. The political drama over who pays may make great television, but it directly undermines the stability needed for long-range planning no matter what the outcome.
The whole dilemma over who bears the costs can be explained easily enough. California law sports a tough interpretation of something called inverse condemnation, which in practice makes it easy to force corporations to pay for damages from events like forest fires, even if the company is not at fault. But there’s a limit to how much loss even the biggest corporations can bear.
PG&E, deemed to have started 14 of the 16 Northern California fires in 2017, suspended its dividend and reserved $2.5 billion by the second quarter of 2018 for estimated charges. A stock that once traded at $70 now hovers around $45.
“Yesterday’s loss won’t help our state deal with the impact of tomorrow’s wildfires,” said Geisha Williams, chief executive officer and president of PG&E, on a July 26 earnings call. The CEO complained, remarking on what she declared was the basic unfairness of inverse condemnation, “The strict liability contract that is applied to investor-owned utilities in California today, is unsustainable and is already having very real consequences.”
Inverse condemnation works like this: In the extreme, if a drunk driver swerves off road and hits a utility pole, which falls and starts a fire, or if a piece of utility equipment even starts or worsens a California blaze, the utility shoulders the damages, regardless of fault. If a utility is truly at fault, because of poor maintenance or negligence, the company should indeed be held liable for the damages, but to operate with strict liability regardless of fault means that higher costs loom in the background for every major California utility.
These costs will ultimately be borne by Californians — hitting the poor the hardest of all because they spend a higher proportion of their income on basics like energy. “We find ourselves in this climate … facing wildfire after wildfire,” said Williams. “The numbers that we’re seeing already in California and in the Western United States (are) staggering. … This is going to be a perennial issue.”
The increased costs stemming from the policy of inverse condemnation still pose a risk. The uncertainty of a disaster imposing huge costs in any given year will certainly affect the utilities’ ability to plan for the long term. In the extreme case, these costs may affect a utility’s ability to convert to 100 percent renewable energy, thereby unintentionally quashing one of California’s energy dreams.
Investors look to utilities to provide them with stability and safety in their retirement years. Strict liability unfortunately detracts from that stability. Until there’s a legislative fix to inverse condemnation, California utility stocks will remain problematic.
ABOUT THE WRITER
Jay Rhame is a portfolio manager at Reaves Asset Management. Reaves Asset Management’s clients have holdings in Exelon and Sempra Energy. He wrote this for InsideSources.com.
Fear, more than hate, feeds online bigotry and real-world violence
Updated November 20, 2018
Author: Adam G. Klein, Assistant Professor of Communication Studies, Pace University
Disclosure statement: Adam G. Klein does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
When a U.S. senator asked Facebook CEO Mark Zuckerberg, “Can you define hate speech?” it was arguably the most important question that social networks face: how to identify extremism inside their communities.
Hate crimes in the 21st century follow a familiar pattern in which an online tirade escalates into violent actions. Before opening fire in the Tree of Life synagogue in Pittsburgh, the accused gunman had vented over far-right social network Gab about Honduran migrants traveling toward the U.S. border, and the alleged Jewish conspiracy behind it all. Then he declared, “I can’t sit by and watch my people get slaughtered. Screw your optics, I’m going in.” The pattern of extremists unloading their intolerance online has been a disturbing feature of some recent hate crimes. But most online hate isn’t that flagrant, or as easy to spot.
As I found in my 2017 study on extremism in social networks and political blogs, rather than overt bigotry, most online hate looks a lot like fear. It’s not expressed in racial slurs or calls for confrontation, but rather in unfounded allegations of Hispanic invaders pouring into the country, black-on-white crime or Sharia law infiltrating American cities. Hysterical narratives such as these have become the preferred vehicle for today’s extremists – and may be more effective at provoking real-world violence than stereotypical hate speech.
The ease of spreading fear
On Twitter, a popular meme traveling around recently depicts the “Islamic Terrorist Network” spread across a map of the United States, while a Facebook account called “America Under Attack” shares an article with its 17,000 followers about the “Angry Young Men and Gangbangers” marching toward the border. And on Gab, countless profiles talk of Jewish plans to sabotage American culture, sovereignty and the president.
While not overtly antagonistic, these notes play well to an audience that has found in social media a place where they can express their intolerance openly, as long as they color within the lines. They can avoid the exposure that traditional hate speech attracts. Whereas the white nationalist gathering in Charlottesville was high-profile and revealing, social networks can be anonymous and discreet, and therefore liberating for the undeclared racist. That presents a stark challenge to platforms like Facebook, Twitter and YouTube.
Of course this is not just a challenge for social media companies. The public at large is facing the complex question of how to respond to inflammatory and prejudiced narratives that are stoking racial fears and subsequent hostility. However, social networks have the unique capacity to turn down the volume on intolerance if they determine that a user has in fact breached their terms of service. For instance, in April 2018, Facebook removed two pages associated with white nationalist Richard Spencer. A few months later, Twitter suspended several accounts associated with the far-right group The Proud Boys for violating its policy “prohibiting violent extremist groups.”
Still, some critics argue that the networks are not moving fast enough. There is mounting pressure for these websites to police the extremism that has flourished in their spaces, or else become policed themselves. A recent Huffpost/YouGov survey revealed that two-thirds of Americans wanted social networks to prevent users from posting “hate speech or racist content.”
In response, Facebook has stepped up its anti-extremism efforts, reporting in May that it had removed “2.5 million pieces of hate speech,” over a third of which was identified using artificial intelligence, the rest by human monitors or flagged by users. But even as Zuckerberg promised more action in November 2018, the company acknowledged that teaching its technology to identify hate speech is extremely difficult because of all the contexts and nuances that can drastically alter these meanings.
Moreover, public consensus about what actually constitutes hate speech is ambiguous at best. The libertarian Cato Institute found broad disagreement among Americans about the kind of speech that should qualify as hate, or offensive speech, or fair criticism. And so, these discrepancies raise the obvious question: How can an algorithm identify hate speech if we humans can barely define it ourselves?
Fear lights the fuse
The ambiguity of what constitutes hate speech is providing ample cover for modern extremists to infuse cultural anxieties into popular networks. That presents perhaps the clearest danger: Priming people’s racial paranoia can also be extremely powerful at spurring hostility.
The late communication scholar George Gerbner found that, contrary to popular belief, heavy exposure to media violence did not make people more violent. Rather, it made them more fearful of others doing violence to them, which often leads to corrosive distrust and cultural resentment. That’s precisely what today’s racists are tapping into, and what social networks must learn to spot.
Why do so many people watch violent TV and never commit a violent act?
The posts that speak of Jewish plots to destroy America, or black-on-white crime, are not directly calling for violence, but they are amplifying prejudiced views that can inflame followers to act. That’s precisely what happened in advance of the deadly assaults at a historic black church in Charleston in 2015, and the Pittsburgh synagogue last month.
For social networks, the challenge is two-fold. They must first decide whether to continue hosting non-violent racists like Richard Spencer, who has called for “peaceful ethnic cleansing,” and remains active on Twitter. Or for that matter, Nation of Islam leader Louis Farrakhan, who recently compared Jews to termites, and continues to post to his Facebook page.
When Twitter and Facebook let these profiles remain active, the companies lend the credibility of their online communities to these provocateurs of racism or anti-Semitism. But they also signal that their definitions of hate may be too narrow.
The most dangerous hate speech is apparently no longer broadcast with ethnic slurs or delusional rhetoric about white supremacy. Rather, it’s all over social media, in plain sight, carrying hashtags like #WhiteGenocide, #BlackCrimes, #MigrantInvasion and #AmericaUnderAttack. They create an illusion of imminent threat that radicals thrive on, and to which the violence-inclined among them have responded.
This article has been updated to correct the political characterization of the Cato Institute.
Wildfire smoke is becoming a nationwide health threat
November 21, 2018
Author: Richard E. Peltier, Associate Professor of Environmental Health Sciences, University of Massachusetts Amherst
Disclosure statement: Richard E. Peltier receives funding from the Department of Energy Resources of Massachusetts
Partners: University of Massachusetts Amherst provides funding as a founding partner of The Conversation US.
The impacts of recent forest fires in California reach well beyond the burned areas. Smoke from the Camp Fire created hazardous air quality conditions in San Francisco, more than 170 miles to the southwest – but it didn’t stop there. Cross-country winds carried it across the United States, creating hazy conditions in locations as far east as Philadelphia.
As an air pollution exposure scientist, I worry about the extreme levels of air pollution that rise from these fires and affect many people across great distances. They can create unhealthy conditions in far-flung locations where residents probably never think about wildfires. But since major wildfires are becoming increasingly common, I believe it is important for all Americans to know some basics about smoke hazards.
A complex and unpredictable threat
Forest fires do not discriminate about what they burn. Along with woody materials from forests and homes, they consume homes’ contents, which may contain plastics, petroleum products, chemicals and metals. This produces thick plumes of smoke that contains very large quantities of particles and gases. Many of these airborne chemicals are known to be quite toxic to humans.
Smoke plumes travel great distances, affecting communities hundreds of miles away. Winds tend to move from west to east across North America and carry these pollutants with them. Sometimes, depending on local weather conditions, the pollutants can be lifted up to high altitudes where wind speeds are faster and transported very quickly across the country. The pollutants can then descend back to the ground in locations far away from the fires, affecting everyone in their path.
Relatively few studies have analyzed broad public health impacts from wood smoke. Agencies such as the National Institute of Environmental Health Sciences are funding some research on this issue, but it can take a long time to produce convincing science, especially on subjects that are so unpredictable.
We do know that this kind of smoke contains chemicals that are toxic, including polycyclic aromatic hydrocarbons, heavy metals, black carbon (soot), acids and oxidizing compounds. Exposure to some of these compounds can lead to lung irritation, cancer, hypertension, cardiovascular disease and even death. We know this because researchers have studied smoke exposure in firefighters for many years, and it’s likely that the risks also apply to people who aren’t firefighters.
In this segment from the Netflix series ‘Fire Chasers,’ a CAL FIRE crew battles an out-of-control fire in Los Angeles that threatens to overtake a house and one of the firefighting engines. Smoke exposure is a serious hazard for firefighters, but also affects the general public.
When the smoke moves in
Research has shown that many health effects from air pollution occur well after exposure has occurred. Sometimes these problems occur within a few hours, but in other cases it can be days or weeks later. This means that people may not feel the impacts of smoke inhalation until well after the smoke clears.
The most effective strategy is to limit exposure to poor-quality air through steps such as avoiding the outdoors when possible, closing windows and doors, and running central heat or air conditioning systems, which for the most part recirculate indoor air. For outdoor protection, the best option is an N95 facemask, which is designed to fit snugly and filter out very small particles. Inexpensive cloth masks do not provide effective protection.
However, it can be difficult to achieve a good fit with N95 masks, and these masks are not very effective at removing toxic gases from smoke, which easily pass through the filter material. Avoiding exposure in the first place is the best strategy.
Communities that are frequently exposed to wildfire smoke should consider creating locations where they can provide high-quality air filtration, such as a school or community center. These sites could offer safer conditions for people who are especially vulnerable to air pollution, such as children, the elderly and people with respiratory ailments, in the same way that cities set up heating and cooling centers during extreme weather conditions.
Many factors appear to be increasing the number and scale of wildfires, including development patterns and forest management practices. But the biggest driver is likely to be climate change, which is making ecosystems hotter and drier. This suggests that all Americans, wherever they live, will need to become more aware of wildfires and their long-range health effects.