Red-faced Renault admits getting it wrong over spying claims

Renault's screeching U-turn over industrial espionage claims has resulted in a corporate car-crash. Time for boss Carlos Ghosn to hit the road?

by Dave Waller
Last Updated: 06 Nov 2012
Oh dear. Poor old French carmaker Renault has been left with some serious oeuf on its visage, after admitting that the three senior execs it sacked back in January for selling secrets about its electric car programme didn't actually do anything of the sort. By the looks of it, they were just the innocent victims of a hoax: Renault’s internal security official Dominique Gevrey has since been arrested trying to board a plane for Guinea, and placed under judicial investigation for organised fraud. It's an extraordinary story - but the fact it only worked this out after sacking the three men so very publicly smacks of spectacular incompetence. And as chairman and chief exec, some think Carlos Ghosn should carry the can...

The whole fiasco began last year, when someone started sending anonymous notes alleging that three top members of Renault's electric car team had taken bribes, via bank accounts in Switzerland and Liechtenstein, to trade secrets about Renault's €4bn electric car plan. This could be a hugely lucrative area for the French carmaker, so you can understand the sensitivity. Yet to have got as far as sacking the three men before ascertaining the validity of the claims is quite remarkable. ‘Of course we are sure,’ said Ghosn, at the time of the allegations. ‘If we weren't sure, we wouldn't be where we are. We're not amateurs. We didn't just invent it all, you know.’ Perhaps not. But clearly someone did: it turns out that there's no evidence for any of it, while the bank accounts never even existed.

The lawyers have accused Renault of ‘paranoia’ - and the board does come across as being fairly Gollum-like, obsessed with the idea that everyone’s after their ‘precious’ technology. Either way, this very public error of judgement is a massive embarrassment. And a costly one too: Renault’s share price has dropped 23% in the month since doubts about the accusations started to surface.

Of course, all of this happened on Ghosn's watch - so it's no surprise that there have been calls for the chairman and CEO to stand down. The company's COO has suggested he might fall on his sword in this eventuality, presumably to spare his boss. And while we have some sympathy for Ghosn - presumably he wasn't involved with the investigation directly - he must still have been involved in the decision to fire the three men so precipitously.

And what about those poor execs who have had their reputations dragged through the mud? Renault says it's very, very, very sorry, and is committed to restoring their ‘honour in the public eye’. Optimistically, it has actually offered them their old jobs back, even as they ponder whether to sue for breach of contract and defamation. Somehow we can't see them going back, can you?

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