Renault revival may hinge on Nissan stake cut

Andrew Cummings
June 12, 2019

French automaker Renault SA has warned its alliance partner Nissan Motor Co that it would block the Japanese automaker's plan to overhaul its governance structure, Nissan confirmed yesterday, a move it called "regrettable".

French Finance Minister Bruno Le Maire is ready to cut the government's 15% stake in Renault to consolidate the carmaker's partnership with Nissan, Agence France-Presse reported on June 8.

But he said any merger would have to ensure the "durability" of Renault's alliance with Japanese automakers Nissan and Mitsubishi Motors, as well as preserve manufacturing jobs in France.

"It's not a final abstention, and Renault's position can still change", the source said.

Renault is pushing for a full merger between the pair, but there is deep skepticism of the plan at Nissan.

Le Maire's comments came only days after Italian-US carmaker Fiat Chrysler (FCA) pulled the plug on a proposed merger with Renault, saying negotiations had become "unreasonable" due to political resistance in Paris. "As now proposed, this does not seem to be the case". "Based closely on these recommendations, Nissan's board voted unanimously to strengthen corporate governance by transitioning from a company with statutory auditors to a company with three statutory committees", said the CEO.

Analysts say it would be hard and costly for Nissan to break away from Renault as the companies, partnering for two decades under Ghosn's leadership, share auto parts, research and investments.

The tensions that have been simmering beneath the surface since the arrest in November of Carlos Ghosn, the alliance's former head, burst into the open after Renault complained that it was being sidelined by Nissan.

"The management of Renault and the management of Nissan must resolve their difficulties and misunderstandings as soon as possible", he said Monday.

But he also said Renault should focus on shoring up its relationship with Nissan before pursuing mergers with other firms. "If there are differences of opinion, then I'd like for those to be discussed", he told Japan's Jiji news agency.

These commissions are being set up to help avoid situations such as those created by Ghosn by handing control over nomination, compensation and audit to three distinct bodies.

"Mr. Ghosn has not, as of today, had a chance to respond to on any of the questions raised", Ghosn's lawyers, Jean-Yves Le Borgne and François Zimeray, said in a statement on Monday.

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