By on May 1, 2015

Carlos Ghosn Circa April 2013

An attempt to bring further integration within Renault-Nissan resulted in the French government tightening its hold on Renault against CEO Carlos Ghosn.

The move by the government Thursday to block the integration effort leaves Ghosn with the choice to either negotiate or fight for integration, Reuters reports. The CEO has long desired to give Nissan more status in the alliance to match its sales and profit, while the administration of French president François Hollande wants to increase its influence upon the French companies it owns, including Renault.

Using a rule allowing the government to double its voting rights on its holdings over two years of age — one companies like Renault-Nissan can choose to opt-out to following — Economy Minister Emmanuel Macron announced the government made a purchase of €1.2 billion ($1.34 billion USD) in Renault shares, increasing its stake from 15 percent to 19.7 percent in order to block the opt-out vote. Just 60.5 percent of shareholders supported the opt-out vote, but a two-thirds majority was needed to make it stick.

Though Macron claimed the move wasn’t a power grab, government officials and company insiders state the move occurred due to the French government’s fears Renault would become more like Nissan, which now accounts for two-thirds of combined sales and a bigger share of the profit shared by the alliance.

With the opt-out vote blocked, the CEO may counter the French government by restoring Nissan’s voting rights via buying back Renault’s shares in the Japanese automaker and/or creating new shares with a capital increase.

Before pulling the trigger on restoration, though, Ghosn may try negotiating for integration with Nissan taking the helm. The government may not be so interested, however; Macron stated that he saw no reason for Nissan to restore its voting rights, and would hold the line “to the end.”

[Photo credit: Norsk Elbilforening/Flickr/CC BY 2.0]

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23 Comments on “Further Renault-Nissan Integration Blocked By French Government In Power Play...”


  • avatar
    CoreyDL

    Well, that’s what happens when you have governments buying control in private companies. You lose your freedom to execute plans as you wish.

    • 0 avatar
      pdl2dmtl

      Corey, the French government owned Renault after 2nd world war until 1996. Yes, it’s unclear how Louis Renault died and this paved the way to nationalization. The French government saved Renault from bankruptcy ( a few times?), therefore I think I would have all the right to do what they did to protect the milking cow. I am not sure how much Ghosn cares about France since he’s a businessman with so many domiciles around the world.
      Look at FCA – their headquarters are in Netherlands (?), therefore not paying so many taxes to the Italian government.
      So there you go, my 2 cents.

      • 0 avatar
        CoreyDL

        That makes sense, I was not aware of the history there.

      • 0 avatar

        Louis Renault was one of the richest men in the world and a fervent anti-communist that may have led him or not to collaborate. That collaboration was one of the reasons France took over Renault.

        Par for the course for French and German companies. If the government sees a threat, they will and do intervene.

      • 0 avatar
        deanst

        What is a milking cow? Did you mean cash cow? If so, I doubt Renault qualifies.

        If you think that just because a government once “saved” a firm that they somehow have perpetual superior rights to govern that company, I suggest you notify current gm shareholders so they have time to flee.

  • avatar
    Noble713

    “due to the French government’s fears Renault would become more like Nissan, which now accounts for two-thirds of combined sales and a bigger share of the profit shared by the alliance.”

    So the French fear Renault becoming….more profitable and successful?
    Makes sense. Success is anathema to the French auto industry.

    • 0 avatar
      dme123

      I think the French are bitter because the English beat them at being shit at running a car company. After all, France only exists to prove that England aren’t even the best at being shit.

  • avatar
    PeriSoft

    Quality at Renault is slipping. That car is clearly only half done.

    • 0 avatar
      CoreyDL

      I was thinking the last Renault to interest me was… the Avantime!

      Now I’m picturing myself driving about in a blue and silver or blue and white Avantime. How fun would that be!

      • 0 avatar
        Lorenzo

        I liked the size, maneuverability, and anonymity of my 1st gen ’95 Altima, but once I realized it couldn’t handle an LS, I got rid of it. By the time Nissan put a stronger engine in the Altima, they’d enlarged it to mid-size.

        • 0 avatar
          sportyaccordy

          Yea the 02 Altima was a boat. Even the 95-99 Maxima was a little too big. Shame they didn’t shoehorn the VQ into something like the G20… might have been able to save it.

          • 0 avatar
            CoreyDL

            I think the 95-99 Maxima was just right. I had a 97 I30, and that was just the right size for daily driving and passengers.

            The VQ didn’t go into the G20 for a couple reasons, primarily because they brought over the Primera without any changes, and also because there’s no way a 3.0 would fit in there. That car is SMALL. You have to realize it’s about the size of a 98 Corolla.

  • avatar
    romismak

    this Renault-Nissan story is good one. French government wants more influence on Renault, Renault guys are worrying that Nissan is gaining more influence in their alliance – which is logical, things changed since 1999, when both companies were about the same size but Renault in good shape and Nissan the one being ,,rescued,, now Nissan is 2x as big and much more profitable than Renault, and Renault is the one ,,controlling,, Nissan and Nissan having basically no rights. Now things look very bad for their future, i mean Ghosn is the right guy for this job, but after his retirement there will be most likely 2 CEO´s – 1 for Renault, 1 for Nissan, + all this stuff around, their alliance doesn´t look so strong for next let´s say 10 years. I think they should be holding together, but i think there is good chance in few years Renault-Nissan alliance might be just ,,partnership,, something like they have with Daimler now, but 2 totally – almost independend automakers, which would be not good for Renault which lacks the scale – Nissan is bigger, profitable + are in some very potential markets – ASEAN, China, NAFTA, while Renault right now only hopes Europe is recovering and not stagnating

  • avatar
    deanst

    Meanwhile, in an espresso bar not to far away, Sergio is planning his next move…….

    But seriously, fiat and Renault only exist because it is too expensive to get rid off all the redundant plants and workers, while guys like Sergio and ghosn do some financial engineering to keep the enterprises alive.

    • 0 avatar

      Never mind they are actually making a buck. All those silly people buying them. Why don’t we all just buy the latest mass approved conveyance? In Europe just give me my Golf. In the US my Camry or F150. Everyone just buy the leaders du jour an be happy.

      Nah, I prefer to have a choice.

  • avatar
    Big Al from Oz

    This is unfortunately the outcome when a heavily socially democratic society exists.

    The French Government is heavily reliant on income from it’s involvement in French business.

    The French must wean themselves off of this reliance. Allow business to flourish as free enterprises.

    Ghosn has every right to be exceptionally pi$$ed at the Hollande led ruling government.

    Ghosn has expended massive amounts of diplomacy across many nations to make the Nissan/Renault Alliance work as it has.

    Well, we will have to wait and see what occurs.

    I wonder if the EU has any rulings that can protect the Nissan/Renault Alliance and stop this from occurring?

    • 0 avatar

      So he would need to expend some more diplomacy internally. Shortsighted or not, it seems to me the French are pretty happy with what they get. They keep voting for it. As they say there Anglo-Saxon lifestyle is not for everyone.

      As to EU don’t hold your breath. The French and Germans do what they like. As do the British. Some pigs “are” more equal.

      • 0 avatar
        Big Al from Oz

        Hey Marcelo!
        From what I’ve also read the French Government was worried that the “Nissan” (read Japanese) would of had too much sway in the running of what the French see as French business.

        This might come back to haunt the French.

        A stronger Renault Nissan would of been better for the French.

        It seems overly political to me.

        • 0 avatar

          It is Big Al, it is. From what I know Renault has the controlling hand in the alliance and ultimately calls the shots. However, Nissan has experienced faster growth than Renault and has a larger participation in more dynamic markets than the French. As such, Japanese nationals and engineering centers have taken on a greater role (and this is what France is worried about). So far the group has produced good results, the Renault-Dacia line being a good example (a Nissan original platform, largely re-worked and engineered following a French idea into what is the fourth most sold car in the world) or the use of Renault engines in Nissans and vice-versa in Brazil. It would be a shame if politics were to pull this company apart and that will be the challenge of Ghosn’s successor, to keep this alive. In the end I think money will talk. This is the fourth largest car company in the world afterall.

          • 0 avatar
            Big Al from Oz

            Hey Marcelo!
            Thanks for your insight.

            I do hope the French don’t screw things up.

  • avatar
    Joss

    Give Renault to Sergio.

  • avatar
    RHD

    Caption Contest time!

    “Carlos Ghosn announces 50 percent off on all new Renaults!”

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