Automotive Politics: Saikawa Stays as Nissan's CEO, Renault's Next Move
Nissan’s Hiroto Saikawa appears to be staying on as CEO, despite claiming late last year that he would soon step down. While not sensational news in itself, the decision is underpinned by growing animosity between the automaker and alliance partner Renault.
Back in March, the Renault-Nissan-Mitsubishi Alliance was doing damage control following the arrest of its chief architect, Carlos Ghosn — resulting in a memorandum of understanding that aimed to restore balance between the automakers and prove to the public that they were all still friends. However, less than a month later, things began to unravel. Renault (encouraged by the French government) was, once again, pushing for integration and hoping to rejigger Nissan’s management structure.
Now the very legitimacy of Nissan’s board is being called into question.
Reuters reported on Thursday that Nissan’s management board unanimously supported Saikawa remaining as CEO, adding that a source close to Renault Chairman Jean-Dominique Senard claimed no such vote had actually taken place regarding Saikawa’s reappointment.
Still, Nissan’s public support of its CEO appears unwavering. The board’s only stated gripe was that he could have potentially done more to rein in Ghosn. Of course, if you asked the defamed executive, he would tell you that he’s only facing charges because of a corporate power struggle. Ghosn has repeatedly insisted that his alleged financial misconduct is a fabrication on the part of Nissan to ensure his removal from any future decision making.
While unproven, it is known that he considered firing Saikawa shortly before his arrest and wished to see a merger between Nissan and Renault — something the Japanese company is categorically opposed to.
“While there are issues pertaining to Saikawa’s responsibility, we feel it is more constructive to focus on cooperation within the alliance, Nissan’s recovery and its strategic plan,” Nissan Director Keiko Ihara said.
“We had a robust debate, we took our time to look at the risks … but in the end all of the directors agreed to the appointment,” she continued, adding that Senard had agreed at a meeting earlier this week to have Saikawa remain as CEO.
With shades of grey on both sides, we can at least say with absolute certainty that Nissan is reeling from an abysmal earnings report. Last year went poorly for the company, with operating profit dropping by 45 percent. Worse still, the company forecasts a 28-percent decline in operating profit this year. Saikawa blamed the majority of these problems on Ghosn’s “negative legacy.”
It’s not the kind of stuff you read about right before someone isn’t fired as CEO. But Saikawa is practically guaranteed to continue opposing a corporate merger, which is enough for many in Japan.
As things currently stand, the board’s size will increase to eleven members from eight. Nissan has suggested adding Renault Chief Executive Thierry Bollore and retaining Senard. The board’s new makeup would include seven outside directors but remain predominantly Japanese. The proposals will be put to a shareholder vote this June.
At this point, Nissan looks so opposed to any potential merger that we’re shocked France is still considering it. The only advantage it has is Nissan’s dismal financial performance from 2018. However, as important as that may be, Japan is already fuming over the lopsided distribution of power and doesn’t want to lose another inch of ground.
[Image: Anton Watman/Shutterstock]
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