The unexpected departure of Jose Munoz, one of the highest-ranking Westerners working for Nissan, is raising new concerns about what former executives and industry insiders warn could become a purge of foreigners linked to the Japanese automaker's dethroned Chairman Carlos Ghosn.
Munoz, who until recently was thought to be in the running for CEO, resigned Friday after the company put him on leave from his regular job as chief performance officer. Nissan assigned Munoz to work on a growing internal investigation looking for financial and other ethical irregularities, according to an industry executive who has close ties to Nissan's board.
Numerous industry executives, even some inside the company, question whether Ghosn's arrest and lengthy detention are more political than criminal.
People familiar with the matter said Nissan's internal investigation is little more than an attempt to wrest power away from Renault, the French automaker that engineered Nissan's 1999 bailout and holds a 43.4 percent stake in its Japanese alliance partner.
A former Nissan executive who worked in Japan and remains close to the automaker was far more blunt. The former executive, who spoke on the condition of anonymity because he's not authorized to speak to the press, said he sees the departure of Spanish-born Munoz as the start of "a bloodbath," a thinly veiled witch hunt to oust Ghosn's allies.
The automaker laid the blame squarely on Ghosn, who was previously heralded as something of a savior in Japan for engineering a bailout that saved Nissan from bankruptcy two decades ago. It also said in a statement that "Nissan does not in any way tolerate such misconduct," something its ongoing investigation is supposed to be rooting out.
And when asked about the circumstances of Munoz's departure, the automaker responded with a terse note saying, "Jose Munoz has elected to resign from Nissan Motor Company, effective immediately."
The 64-year-old Ghosn was arrested Nov. 19 shortly after landing in his corporate jet at Haneda Airport in Tokyo. He's been charged, among other things, with undereporting his income at Nissan by about 9.1 billion yen (about $84 million) over eight years ending March 2018. He's denied all charges, telling a Japanese judge Jan. 7 that he believes he acted "honorably, legally and with the knowledge and approval of the appropriate executives inside the company."
Japanese prosecutors also filed charged against an American colleague, Greg Kelly, as well as Nissan itself.
"I have been wrongly accused and unfairly detained based on meritless and unsubstantiated accusations," Ghosn told the court in his first public appearance since his arrest.
Since November 2016, Munoz had been serving as Nissan's chief performance officer, a job that seemed well-suited for a man credited with driving the automaker to a solid No. 1 spot during his tenure heading Nissan Mexicana. He became a top Ghosn lieutenant and was subsequently appointed head of North American operations.
"He had a tough assignment but drove as hard as anyone I've ever seen," said a current executive who reported to Munoz in the U.S.
Nissan CEO Hiroto Saikawa has repeatedly criticized the man once seen as his mentor, but has also expressed a desire to shift the balance of power in the Renault-Nissan-Mitsubishi Alliance. The French carmaker currently has the right to unilaterally name Nissan board members and senior executives. It is widely believed that when he was arrested, Ghosn had traveled to Japan to fire Saikawa and replace him with an executive more palatable to Renault.
Now, however, it is Ghosn that has been ousted as chairman of Nissan, as well as chairman of Mitsubishi, the smaller automaker that he directed Nissan to bail out in 2016.
"Once you get new management in, invariably, things begin to shake up," said Joe Phillippi, an auto analyst and head of AutoTrends Consulting. The crisis surrounding the prosecution of Ghosn could give Nissan executives, starting with Saikawa, "an opportunity to clean house."
Munoz was highly regarded at Nissan and close to Ghosn. He was credited with helping the former chairman meet the goals of the Power 88 corporate plan put in place in 2011: an 8 percent global market share and an 8 percent operating profit margin. While Nissan fell short on a global basis, Munoz briefly drove the company's U.S. operations up to a 10 percent market share. That fell back to 9.2 percent in 2017, the year after he took on his new job, but he was still given credit for setting into motion the strategy that delivered record U.S. sales of 1.6 million vehicles.
The first sign that something might be wrong came last week when Munoz proved a no-show for the events Nissan had planned at the Consumer Electronics Show in Las Vegas. That included the debut of an all-new version of the Leaf battery-electric vehicle. While it has been the world's best-selling BEV, sales have been sliding as Tesla has gained rapid momentum with its Model 3. The new Leaf is aimed at shoring up its position by boosting range to 226 miles, or triple what it first offered in 2011.
Reports indicate that Munoz had been called to Japan to work on the ongoing investigation that Nissan claimed had uncovered evidence of Ghosn's corruption.
"Unfortunately, Nissan is currently involved in matters that have and will continue to divert its focus. As I have repeatedly and recently made clear to the company, I look forward to continuing to assist Nissan in its investigations," Munoz wrote in a post on his LinkedIn page, adding that he decided to leave the company. He didn't immediately respond to a request for comment.
The industry executive close to the Nissan board told CNBC that Munoz was concerned that the ongoing investigation was intended to do more than just look into corruption involving Ghosn and Kelly, however.
"They have 100 people assigned to dig up dirt on people and pressure them to either leave under disgrace or turn state witness against Ghosn," he said. "Jose wasn't going to do that. He felt they were going to fire him. To retain his dignity and to avoid a public fight he went ahead and quit."
Several people with direct knowledge of the matter indicated that Munoz wasn't the only Nissan veteran who has been concerned about the handling of the Ghosn affair.
On Wednesday, Toshiyuki Shiga, a former chief operating officer at Nissan who has continued serving on the company's board, announced he would retire at the end of his current term. Shiga issued a formal statement that said, "I think it's time to make room for the next generation." But several people close to Nissan have said Shiga privately expressed his concerns about Ghosn's arrest and the way Nissan had handled the case.
Efforts to reach Shiga by CNBC have not been successful.