Nissan-Renault Relationship Has Not Improved, Despite Assurances to the Contrary
If Nissan and Renault were a living, breathing couple, they’d be the duo all of your other friends whisper about. They’d be the couple with the big house and seemingly successful children that everyone knows fights bitterly in the evenings — screaming at each other before retiring to their separate bedrooms. The relationship, while healthy in terms of financial productivity, has grown toxic on the corporate end of things.
Less than one month after Renault’s new chairman claimed a merger would be out of the question, the French automaker is once again pushing for integration. Nissan is having none of it and plans to reject the proposal outright, according to reports from Nikkei.
France’s government, which holds a 15-percent stake in Renault, has encouraged the automaker to solidify its ties with the Japanese company for years. Despite being largely dependent upon Nissan for new product and strong global sales, Renault owns 43.3 percent of Nissan, while the Japanese firm only holds a 15-percent stake in the French carmaker. It’s clearly in Renault’s best interest to lock Nissan into a legitimate marriage — a trick it has yet to pull off.
Former Alliance head Carlos Ghosn, who was indicted for a fourth time by Japanese prosecutors on Monday, has claimed his incarceration is a direct result of a corporate power struggle with Nissan’s top brass. While the legitimacy of those claims can be debated, there was clearly fallout stemming from his drive to see the pair enter into an “irreversible” partnership. Nissan wants voting rights within the Alliance, something it currently lacks, and has grown increasingly vocal about the issue.
For its part, Nissan’s management feels the company has not been treated as Renault’s equal under the existing capital ties. It fears a merger or some form of integration under a holding company would make that inequality permanent, the sources said. [Jean-Dominique] Senard, who took over from Ghosn in March, ruled out talk of a merger in an interview with Nikkei soon after becoming chairman.
“If I were to talk about a merger, it would be to talk about the intelligent merging of our cultures to make the alliance very efficient. All other ideas would not be relevant,” he said. In a separate interview the same month, he also said the companies were not discussing reworking the capital relationship.
Both sides have stressed that the priority since Ghosn’s departure is to repair their alliance, which is the world’s second bigger car producer. But sources said this could now be more difficult.
Nissan’s continued resistance to the concept of a merger highlights the company’s longstanding suspicion of the French government’s intentions. Nissan has repeatedly pushed for an equal capital relationship between the two companies, but has been reluctant to increase its own stake in Renault due to concerns that it could regarded as an aggressive act by the French manufacturer.
However, depending on what you believe happened prior to Ghosn’s initial arrest and how guilty he is, Nissan hasn’t played softball. The company clearly seemed to think that, with him gone, merger talks would evaporate (at least for a while) and it could focus on improving corporate efficiencies without fighting against integration proposals.
Despite Renault being all smiles about the future last month, Nissan was wrong. The French government already said it wanted to see management union under a holding company structure last January. And Renault’s latest merger proposal appeared on Nissan’s doorstep within the past two weeks, according to reports.
At the end of the day, France wants to keep Nissan around to help pad Renault’s global sales and share the cost of developing advanced technologies. Over half of the Renault-Nissan-Mitsubishi Alliance’s annual volume can be attributed to Nissan; the company also managed to outspend Renault on capital investments by $1 billion in 2018.
Japan is having difficulty seeing what’s to be gained on its end. Meanwhile, at-home investors have already expressed concerns over both the possibility of a merger and Renault’s role in the company’s future — Nissan even had an emergency meeting about it. The country’s Ministry of Economy, Trade and Industry was also said to have communicated directly with the French government to ask it to nix an earlier integration proposal against Nissan’s wishes.
“As you could see, the draft is going a little too far even in our view, when the French state is staying quiet,” Nissan’s head of government affairs, Hitoshi Kawaguchi, wrote in a May 2018 message to the Ministry about a memo it sent to France asking to respect the automaker’s independence. “Though support by the Japanese government is appreciated, it is a private company matter at the end of the day.”
What a mess. At this point, it’s hard imagine what the best path forward for either automaker. Renault clearly doesn’t want to lose access to Nissan’s strength, but trying to hold onto it is only making the company less eager to maintain the relationship.
Join the conversation
Latest Car ReviewsRead more
Latest Product ReviewsRead more
- Vulpine Regretfully, rather boring. Nothing truly unique, though the M715 is a real eye-grabber.
- Parkave231 This counts for the Rare Rides installment on the Fox Cougar and Fox Thunderbird too, right? Don't want to ever have to revisit those......(They should have just called them Monarch/Marquis and Granada/LTD II and everything would have been fine.)
- DM335 The 1983 Thunderbird and Cougar were introduced later than the rest of the 1983 models. If I recall correctly, the first models arrived in January or February 1983. I'm not sure when they were unveiled, but that would explain why the full-line brochures for Ford and Mercury were missing the Thunderbird and Cougar--at least the first version printed.The 1980 Cougar XR-7 had the same 108.4 inch wheelbase as the 1980 Thunderbird. The Cougar coupe, sedan and wagon had the shorter wheelbase, as did the Ford Granada.
- Ehaase 1980-1982 Cougar XR-7 shared its wheelbase and body with the Thunderbird. I think the Cougar name was used for the 1977 and 1981 sedans, regular coupe and wagons (1977 and 1982 only) in an effort to replicate Oldsmobile's success using the Cutlass name on all its intermediates, although I wonder why Ford bothered, as the Granada/Cougar were replaced by the Fox LTD/Marquis in 1983.
- Ken Accomando The Mark VIII was actually designed before the aero Bird, but FMC was nervous about the huge change in design, so it followed the Thunderbird a year. Remember, at this time, the 1983 Thunderbird was the first new aero Ford, with the Tempo soon following. It seems so obvious now but Ford was concerned if their buyers would accept the new aero look! To get the Lincoln buyers warmed up, they also debuted for the 1982 auto show season the Lincoln Concept 90…which really previewed the new Mark VII. Also, the new 1983 Thunderbird and Cougar debuted a little late, in Nov 1982, so perhaps that’s why they were left out of the full line brochures.
If Nissan had been "bought" by a US manufacturer in 1999, who'd want to bet that their current management and Japan's anachronistic and xenophobic police and political class would be holding onto a US citizen CEO in jail, slowly drip-feeding additional charges? Not a chance, Trump would have a fit, and France is none too happy about the situation either. If there is free flow of capital, and your company is far more owned by another than your share of them, what does Nissan expect? That the majority owner will just fade away into the weeds? Apologizing? All this wriggling around by Nissan to remove what they perceive as a yoke, completely overlooks the fact that they were about to declare bankruptcy 20 years ago, and were rescued by another party who assumed vast risk to do so. They survived with external help and now want to forget that dishonor as if it never existed. But it did, and they need to recall it. Has Japan ever apologised about their treatment of Allied prisoners in WW2? Germany has on many levels. The Japanese seem to think only their way is the right way. I hope France through Renault puts the boots to Nissan. My two cents anyway.
Same story with Chrysler. FIAT saved Chrysler from liquidation 10 years ago but now Chrysler generates most of profits and no one complains that all decisions are made in Turin. Unlike Japanese Americans have no pride. Chrysler was abused and used up by Germans and thrown out to rot. Talk about abusive European husbands.