Renault Chairman Still Carries a Torch for FCA Merger
While the proposed merger between Renault and Fiat Chrysler Automobiles was stymied after the French government refused to sign off on the deal without support from Renault’s Japanese partners, Chairman Jean-Dominique Senard has indicated he’s still keen on the idea.
Nissan’s reluctance to endorse the arrangement last June may have queered the deal, but things are evolving. The Japanese automaker has strived to reduce Renault’s influence in the automotive alliance, especially since the November arrest of Carlos Ghosn. Unfortunately for Nissan, ex-CEO Hiroto Saikawa was also caught up in the financial scandal — forcing him to resign. The Japanese automaker is now seeking a permanent replacement while CFO Yasuhiro Yamauchi runs things in the interim.
While it’s unlikely to make Japanese shareholders supportive of French involvement, it does provide an opportunity for Nissan to find a new chief executive who’s a bit more sympathetic to Renault’s desires.
“[If a FCA merger proposal] were to come back under conditions that are acceptable for all, I would be delighted,” Senard told French officials on Tuesday. The chairman also confirmed that no such deal is being discussed, according to Bloomberg.
While Fiat Chrysler remains pretty quiet on the issue, it’s widely known that it’s seeking to partner with another automaker. The current situation may make Renault less palatable but that doesn’t necessarily have to be true in the future. Hiroshige Seko, the economy and trade minister of Japan, and Bruno Le Maire, France’s finance minister, have already indicated that it’s in the countries’ best interests to restore the alliance — emphasizing fairness. Earlier this month, the pair announced a cooperative agreement for the countries to work together on advanced automotive technologies.
“The two ministers reaffirmed their strong support for the Nissan-Renault alliance and discussed the two companies’ discussions to strengthen the alliance’s competitiveness,” explained the joint statement.
Renault may press Nissan’s next leader to endorse the previously proposed merger with FCA. The hard part will be ensuring that Saikawa’s replacement is inclined to listen. The CEO search has been going on since July, with the final decision expected to take place in October. With Senard already on the six-member nominating committee, there’s an opportunity to get someone that’s sympathetic to Renault’s goals.
This will not be CEO’s primary concern, however. Nissan needs to turn its financial situation around immediately — and this issue will take precedence over ensuring the automaker’s autonomy within the alliance or doing partner members any favors. The Japanese firm also wants to equalize the cross-shareholdings that favor the French side of the alliance while minimizing the involvement of the French government. Nissan currently holds a 15-percent stake in Renault with no voting rights, while Renault has 43 percent of the Japanese company, with votes.
Takaki Nakanishi, president of the Tokyo-based Nakanishi Research Institute, expressed fears that Nissan’s next CEO could face insurmountable obstacles due to being stretched in so many different directions. “I have doubts about whether the nominating committee can carry out its function properly,” he said.
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Another honcho intent on empire building. FCA would bring precious little to Nissan/Renault.
I seem to recall that the French government was seeking guarantees that operations in France would be fully maintained, and other assurances that there would be no negative impact on France, which FCA and Renault regarded as excessive. I do not recall that the French government had any concern for Nissan's views on anything. I could be mistaken, of course. Speaking of mistaken, "(he) has strived" is simply not part of the English language. One can say "he strove" or "he has striven".