By on February 16, 2018

Carlos Ghosn

Carlos Ghosn is pledging to solidify the alliance between Renault, Nissan, and Mitsubishi Motors after agreeing to stay on as the French automaker’s chairman and CEO for the next four years. He also announced the companies will take the next few weeks to develop a plan to “make the alliance irreversible.”

While we’d love to hear about an automotive blood pact or — better still — a strategy to clone Ghosn for the next hundred years, the final plan will probably be a little more mundane. But, according to the chairman’s Friday announcement, it will not include a merger — at least not until the French government gets out of the way.

“For the moment, I don’t see how the Japanese side is going to accept further steps with the French state as a major shareholder,” he told analysts at Renault headquarters, near Paris. Ghosn says any changes in the financial structure of the alliance would have to be approved by both the French and Japanese governments first. It’s something he has said in the past and will likely reiterate in the future.

Ghosn remains chairman at all three companies. Despite abandoning his role as Nissan’s chief executive last year, he has persisted as CEO of Renault since 2005. He is frequently hailed as Nissan’s savior, bringing it back from the edge of failure nearly two decades ago, and working to form the three-way alliance while embarking on an aggressive global expansion plan.

France, which owns a 15 percent stake in the company, recently sold off 4.73 percent of its previous holdings. President Emmanuel Macron agreed to divest in the automotive sector if he won the election. However, he and Ghosn have something of a rocky history with each other. Macron has been critical of the alliance chairman’s “high level of compensation,” while Ghosn has been extremely negative over the government’s investment in Renault. Macron helped build up the larger governmental holding of the company in 2015 during his tenure as France’s economy minister.

However, things appear to be working out so far. Carlos agreed to cut his salary by about 30 percent and the government let go of some of its shares.

“We want to build new era of relations between Renault and the state,” French Finance Minister Bruno Le Maire said on television earlier this week.

What that would entail is unknown, but it may indicate France is preparing to loosen its grip on the company. That could make a full merger of Renault and Nissan “a very real possibility,” Evercore ISI analyst Arndt Ellinghorst told Bloomberg. Officially, though, France has publicly stated it currently has no plans to sell any more Renault shares.

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