Nissan-Renault Alliance to Be Led Jointly by CEOs After Ghosn

(Bloomberg) -- The chief executive officers of Renault SA, Nissan and Mitsubishi Motors Corp. will jointly lead their automaking alliance for now, splitting a role maintained by Carlos Ghosn for two decades following his arrest this month.

The three chiefs are “completely aligned on direction,” Nissan Motor Co. CEO Hiroto Saikawa told reporters Thursday, following the first meeting of the alliance board since Ghosn was jailed over alleged financial improprieties and stripped of his job as chairman of the two Japanese members of the partnership. Bloomberg reported on Monday that a split of the top job among the three partners was being considered.

“It was an extremely good meeting,” Saikawa said. “We were able to confirm that the three of us would take the lead, which was excellent."

While Ghosn is in detention, he still holds the alliance titles of chairman and CEO. No changes were made to capital structure or governance, said a person with knowledge of the matter who asked not to be identified.

The companies sought to reassure investors and employees their Franco-Japanese partnership was secure following the meeting in Amsterdam. Ghosn, one of the world’s most visible corporate leaders, was closely identified with the alliance and his stature helped to enforce a structure that kept a lid on differences between Renault and Nissan. Since his arrest, some divisions have bubbled to the surface, raising concern about the stability of the pact.

“For two decades, the success of the alliance has been unmatched,” the companies said in a joint statement Thursday. “We remain fully committed to the alliance.”

A key question has been who will lead. Currently Renault has the right to appoint the chairman and CEO of the alliance, with Nissan picking the vice-chairman. Splitting the leadership defuses that question for now, and helps the companies move forward post-Ghosn without a major hitch.

The board didn’t discuss personnel appointments, just operations, Saikawa said. Speaking separately to reporters, Mitsubishi Motors CEO Osamu Masuko said it was important to restore a sense of normalcy, and that alliance rules weren’t discussed.

The CEOs of the three companies earlier sent a message to employees aimed at dampening fears of divisions between France and Japan, and to minimize the impact of Ghosn’s departure.

“The alliance is not national, but global, and requires not a few individuals, but our entire team to deliver,” said the letter, signed by Saikawa, Masuko and Renault interim CEO Thierry Bollore. “We are confident that we can rely even more on the alliance, based on the solid foundations built by the dedication of all since 1999.

Renault has been happy with the status quo, which it dominated under Ghosn thanks to its outsize stake in Nissan, and has been looking to make it permanent. The effort has been championed by its largest shareholder, the French state, stoking tension with Japan.

Nissan has been eager to equalize power at the alliance and assert Japanese control over one of the country’s most important companies, according to people familiar with the matter. That’s led to fears on the French side that Ghosn’s arrest may have been orchestrated in what amounts to a coup, a charge Saikawa has denied. Tokyo prosecutors will seek to extend Ghosn’s detention for another 10 days, Kyodo News reported, without saying where it got the information.

Despite the tensions, analysts have lauded the industrial logic of collaboration. It makes no sense to suddenly part ways, said Takaki Nakanishi, an analyst at Jefferies in Tokyo.

“Nissan Renault worked so hard to create this alliance in the past 20 years. It’s really hard to become zero overnight,” Nakanishi said. “They should sit down to regain trust and confidence and make a rational decision on what’s good for them.”

In June, the alliance said it was on track to reach a target of more than 10 billion euros ($11.4 billion) in combined cost savings and incremental revenue through 2022, through joint manufacturing platforms and combining efforts for research and development. The companies said they expected to use common powertrains in 75 percent of the vehicles they produced by that time, up from one-third currently.

Shares of Renault advanced 1 percent in Paris, while Nissan rose 1.4 percent and Mitsubishi gained 0.3 percent in Tokyo. The alliance announcement came after Japan’s stock market closed.

The Amsterdam meeting was set up prior to Ghosn’s arrest. Executives were scheduled to discuss alliance operations, such as mobility, regional development, R&D and its Russian business.

That led to a somewhat unusual arrangement. Saikawa and Bollore and Masuko all participated via video conference, while reporters staked out the Brutalist HQ building in Amsterdam with no access to the proceedings. Photographers snapped photos of attendees through the tinted windows of Renault Talisman sedans as they pulled in.

--With assistance from Tian Ying and Ma Jie.

To contact the reporters on this story: Kiyotaka Matsuda in Tokyo at kmatsuda@bloomberg.net;Ichiro Suzuki in Tokyo at isuzuki@bloomberg.net;Ania Nussbaum in Paris at anussbaum5@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net;Anand Krishnamoorthy at anandk@bloomberg.net

©2018 Bloomberg L.P.