Proposed FCA-Renault Merger Puts Nissan in a Awkward Spot

Steph Willems
by Steph Willems

Nissan has long felt like an unequal partner in its alliance with Renault, and has continually resisted pressure to strengthen its ties with the French automaker. With a potential merger between Fiat Chrysler and Renault now in the discussion phase, the Japanese automaker, having just suffered a year of sales and profit losses, finds itself staring down the barrel of further inequality.

Should the Italian-American and French companies merge, Nissan’s influence would shrink by half. Still, the automaker claims it’s open to discussion.

Currently, Nissan holds a 15-percent stake in Renault, with no voting rights, versus Renault’s 43.4-percent stake in its own business, plus voting rights. Under a merger scenario, the new entity would maintain its stake in Nissan, though Nissan’s stake in Renault would shrink to 7.5 percent.

Similarly, the French government would see its 15-percent stake in Renault drop to 7.5 percent.

The concern is that Nissan’s influence in the relationship would erode further, weakening its bargaining power and kiboshing future attempts to assert itself. There’s also the issue of technology and platform sharing, something the Renault-Nissan-Mitsubishi Alliance was built on. As Hans Greimel posits in Automotive News, what becomes of Nissan’s truck presence in North America under such a scenario?

FCA CEO Mike Manley is eager for a Ram-badged midsize truck to compete against Ford, General Motors, and Toyota. While the architecture underpinning Nissan’s replacement for the ancient Frontier, a new platform spearheaded by Mitsubishi, could be of use to FCA, Nissan’s full-size Titan and larger Titan XD would find themselves in an awkward relationship with Ram’s far more popular 1500 and HD.

Meanwhile, the French government has demands.

As reported by Reuters Tuesday, French finance minister Bruno Le Mair told local media that, while the proposed merger holds opportunities for Renault and the European auto industry, his government’s support hinges on a number of guarantees. Not surprisingly, French jobs are top of mind.

“The first: industrial jobs and industrial sites. I told the Renault chairman very clearly that it was the first of the guarantees I wanted from him in the opening of these negotiations. A guarantee on the preservation of industrial jobs and sites in France,” Le Mair said.

The minister added that his country desired adequate French representation on the entity’s board, as well as a guarantee that the country be a leader in the development of electric vehicle batteries. He also wished to see the merger occur “within the framework of the alliance between Renault and Nissan.”

Nissan’s CEO, Hiroto Saikawa, told a Japanese news outlet on Tuesday that “strengthening the alliance and constructive discussions are forward looking, and we are open to constructive discussions.”

As news of the potential merger broke Monday, the Italian government also took interest, mulling a stake in the combined entity to offset its partial French ownership.

[Image: Memory Stockphoto/Shutterstock]

Steph Willems
Steph Willems

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  • Tsavo Tsavo on May 28, 2019

    Too bad, Nissan. Throwing Ghosn in jail is now going to bite you in the ass in a big way.

  • Sportyaccordy Sportyaccordy on May 28, 2019

    I'm kind of amazed that nearly 20 years after its salvation Nissan is right back on the brink of collapse. Someone on another comment thread about this whole thing called Nissan the Chrysler of Japan. Judging by these proceedings that sounds like wishful thinking

    • See 2 previous
    • Lorenzo Lorenzo on May 30, 2019

      @don1967 Well, it's no worse than running, because bears can run faster, nor playing dead, because bears eat dead things. There's always the GM way of stripping down higher level cars until they're just a few dollars more than an optioned up smaller model, causing people to buy the bigger car for just a little more money. There doesn't seem to be a bear analogy for that.

  • JK I grew up with Dodge trucks in the US, and now live in Turin, Italy, the home of Fiat. I don't think Italians view this as an Italian company either. There are constant news articles and protests about how stalantis is moving operations out of Italy. Jeep is strangely popular here though. I think last time I looked at stelantis's numbers, Jeep was the only thing saving them from big big problems.
  • Bd2 Oh yeah, funny how Trumpers (much less the Orange Con, himself) are perfectly willing to throw away the Constitution...
  • Bd2 Geeze, Anal sure likes to spread his drivelA huge problem was Fisher and his wife - who overspent when they were flush with cash and repeatedly did things ad hoc and didn't listen to their employees (who had more experience when it came to auto manufacturing, engineering, etc).
  • Tassos My Colleague Mike B bought one of these (the 300 SEL, same champagne color) new around June 1990. I thought he paid $50k originally but recently he told me it was $62k. At that time my Accord 1990 Coupe LX cost new, all included, $15k. So today the same car means $150k for the S class and $35k-40k for the Accord. So those %0 or 62k , these were NOT worthless, Idiot Joe Biden devalued dollars, so he paid AN ARM AND A LEG. And he babied the car, he really loved it, despite its very weak I6 engine with a mere 177 HP and 188 LBFT, and kept it forever. By the time he asked me to drive it (to take him to the dealer because his worthless POS Buick Rainier "SUV" needed expensive repairs (yes, it was a cheap Buick but he had to shell out thousands), the car needed a lot of suspension work, it drove like an awful clunker. He ended up donating it after 30 years or so. THIS POS is no different, and much older. Its CHEAPSKATE owner should ALSO donate it to charity instead of trying to make a few measly bucks off its CARCASS. Pathetic!
  • RHD The re-paint looks like it was done with a four-inch paintbrush. As far as VWs go, it's a rebadged Seat... which is still kind of a VW, made in Mexico from a Complete Knock-Down kit. 28 years in Mexico being driven like a flogged mule while wearing that ridiculous rear spoiler is a tough life, but it has actually survived... It's unique (to us), weird, funky (very funky), and certainly not worth over five grand plus the headaches of trying to get it across the border and registered at the local DMV.