Nissan Seeking Curbs on Renault Choosing Board Members
Nissan also wants to renegotiate Renault’s power to appoint the head of the company that holds their alliance together.
(Bloomberg) -- Nissan Motor Co. is accelerating its bid to redress imbalances in the world’s biggest auto alliance after Carlos Ghosn’s arrest, seeking to limit the power of partner and top shareholder Renault SA to nominate officials to its board, people familiar with the plan said.
The Japanese carmaker also wants to renegotiate Renault’s power to appoint the head of the company that holds their alliance together, the people said, asking not to be identified discussing private matters.
The downfall of Ghosn, who engineered the alliance between Renault and Nissan, risks igniting a battle for power between the two carmakers that could devolve into one of the toughest corporate slugfests of recent times. While both sides say they are committed to the partnership, Nissan has moved swiftly to gain the upper hand since it revealed a week ago an investigation found Ghosn had under-reported his income and misused company assets. Nissan, which dismissed Ghosn as chairman last week, is seeking a review of the alliance’s structure and voting rights, people familiar with the situation said last week.
The two companies and their third, smaller partner Mitsubishi Motors Corp. are due to meet in Amsterdam this week. Nissan doesn’t expect that capital changes will be discussed at the meeting, a person familiar with the matter said. Nissan views that negotiations about rebalancing ties should be done with mutual understanding, and that first the two companies must share an understanding about the need to dismiss Ghosn, the person said.
A Nissan spokesman declined to comment.
The two companies’ alliance has existed for almost two decades. In 2002, they formed Renault-Nissan B.V., an equally owned company incorporated under Dutch law that is responsible for the partnership’s strategic management.
Under the alliance’s governance rules described in Renault’s annual report, it’s clear that tension between the two carmakers would render decision-making tricky. Ghosn is still chairman of the alliance’s board while Nissan Chief Executive Officer Hiroto Saikawa is vice chairman. The French partner has the power to appoint the chairman, while the vice chairman comes from the ranks of the Japanese manufacturer. All decisions and recommendations “are always made by consensus between the two shareholders,” the document states.
Calling the alliance “indispensable,” French Finance Minister Bruno Le Maire said Sunday he wants to strengthen it while maintaining the rules that require Renault’s chairman to serve in the same role at the head of the alliance.
Ghosn was arrested on Nov. 19 and Nissan dismissed him as chairman on Nov. 22. Mitsubishi, which joined the alliance in 2016, is due to vote today on removing Ghosn as its chairman. Renault stopped short of dismissing the 64-year-old, instead naming deputy Thierry Bollore as interim CEO.
In an address to Nissan’s global employees Monday, Saikawa said Ghosn held too much power at the company. Conversations between Nissan and Renault had to go through Ghosn, who also had the final say on matters, which made such communications less meaningful, Saikawa said. Saikawa also said he feels he enjoys Renault top management’s trust, having worked with them frequently.
Renault, which has the French state as its biggest shareholder, has a 43 percent voting stake in Nissan, which in turn owns just 15 percent of Renault, with no voting rights. Nissan has also long been irked by what it sees as the French government meddling in the alliance.
The structure has become increasingly controversial in Japan due to Nissan’s improved performance. Nissan sold about 5.8 million cars last year -- compared with just 3.7 million for Renault -- and provides links to China, where Renault only has a small presence, and the U.S., where the French carmaker is absent.
According to Japanese corporate law, Renault’s voting rights could be canceled if Nissan raises its shareholding to more than 25 percent in the French carmaker. Under French rules, if Renault lowered its stake in Nissan below 40 percent, then it will help the Japanese carmaker get voting rights in the French company.
--With assistance from Ania Nussbaum and Tara Patel.
To contact the reporters on this story: Ma Jie in Tokyo at jma124@bloomberg.net;Kae Inoue in Tokyo at kinoue@bloomberg.net
To contact the editors responsible for this story: Emma O'Brien at eobrien6@bloomberg.net, ;Anand Krishnamoorthy at anandk@bloomberg.net, Ville Heiskanen
©2018 Bloomberg L.P.