France Is Said to Back Ghosn's Renewal as CEO of Renault

(Bloomberg) -- France is ready to back the renewal of Carlos Ghosn as chief executive officer of carmaker Renault SA -- but with some strings attached.

The government wants Ghosn to prepare a road map by June on how to better integrate an alliance with longtime partner Nissan Motor Co. as well as coming up with a progressive succession plan, said an economy ministry official, who asked not to be identified in line with policy. France holds a 15 percent stake in Renault.

The government’s decision to back Ghosn, 63, ends weeks of speculation about whether he would retain the chairmanship and step down as CEO in order to loosen his control over day-to-day operations. Instead, Ghosn will propose to the board on Thursday the naming of a chief operating officer -- who will effectively become his No. 2, the official said.

On who would be named to that position, the economy ministry official said the government would welcome Renault’s Thierry Bollore, 54, if he is proposed to the board. Bollore, a French national, is currently chief competitiveness officer and the promotion would put him in line to succeed Ghosn at the top job.

The uncertainty about Ghosn’s role has served to highlight tension within Renault’s management and questions about its longer-term succession plan. The longtime car-industry boss is also chairman at Mitsubishi Motors Corp. and at Nissan, where he relinquished the CEO title last February. While retaining leadership roles at all three manufacturers, Ghosn will continue to head the Franco-Japanese alliance he helped to build after saving Nissan from near-collapse.

‘Caring’ Custodian

Bollore is “suitably qualified for the job,” Evercore ISI analyst Arndt Ellinghorst, wrote in a note, adding that he may be perceived as a “more caring custodian of French jobs and interests.” The executive began his career at tiremaker Michelin.

Going a step further, the analyst said this could give the French government “political and economic protection to reduce its stake,” ultimately making a full merger of Renault and Nissan “a very real possibility.”

Ghosn said a year ago there would be no merger between Renault and Nissan as long as the French government is a shareholder. France raised its stake in 2015, under President Emmanuel Macron, who was economy minister at the time.

The move was aimed at thwarting an effort by Nissan to gain more influence over the carmaker, which is based in Boulogne-Billancourt, near Paris. The state has no plan to sell Renault shares, the government official said.

Reuters reported last week that Thierry Desmarest, the 72-year-old former CEO of French oil giant Total SA, has resigned from Renault’s board, while the automaker’s performance chief, Stefan Mueller, will also leave the company.

©2018 Bloomberg L.P.