Renault Chairman Gives Himself One Year to Fix Alliance With Nissan

Matt Posky
by Matt Posky
renault chairman gives himself one year to fix alliance with nissan

Now that the Renault-Nissan-Mitsubishi Alliance has its upper echelon sorted, the time has come to mend the partnership properly. With the new staffers healthily distanced from the old guard of the Ghosn era, Renault Chairman Jean-Dominique Senard is giving himself one year to fix things before considering the entire issue a “failure, on a personal level, and by our teams.”

Senard didn’t explain the benchmarks for success, and twelve months doesn’t allot much time to right a ship that’s been listing for several years. Rumors exist that Renault may even be looking to ditch Nissan for becoming too much of a burden. Meanwhile, the Japanese automaker’s former CEO, Hiroto Saikawa, estimated the company’s vast restructuring efforts would not significantly improve profitability for at least another year.

However, most of what we’ve heard from Nissan and Renault leadership includes a concerted effort to restore trust within the auto alliance and strengthen industrial ties. Contentious merger talks have also fallen by the wayside and are unlikely to crop up after Renault’s own profitability warning from earlier this month.

That may be good news for Japanese investors concerned with French influence. Renault is undoubtedly looking at its balance sheet and someone has probably brought up the possibility of selling assets, including Nissan shares. The French automaker currently owns 43 percent of company with voting rights. Meanwhile, France’s government has a 15-percent stake in Renault — often flexing a bit of bureaucratic muscle to help steer the automaker’s trajectory. But some analysts suggest the company could also be seeking to cut those ties, as well.

The Commissioner of French State Holdings, Martin Vial, has similarly entertained the possibility of the alliance shifting its balance — including reduced governmental involvement. But nothing official has been announced by any of the involved parties.

What is certain is that Nissan’s lower earnings has negatively impacted Renault, with the French carmaker developing a much bleaker outlook for the future. Weakening global economies, fast-changing emission rules, and diminished demand for new cars may have also played an important factor.

It’s too early to automatically assume the alliance is about to fracture, however. According to Reuters, Senard said collaborative industrial projects between Renault and Nissan would take priority over any discussions of a potential merger deal with Fiat Chrysler Automobiles. He also suggested that reducing Renault’s stake in Nissan didn’t sound particularly appetizing.

“Nothing can ever be excluded, [but] this is not what we’re focused on,” he said.

Nissan’s replacement for Saikawa, Makoto Uchida, has similarly promised to improve alliance relations, adding that the Japanese firm was “ on the right path for recovery.” Scheduled to assume his new post as CEO in January, the incoming boss has already warned that the automaker’s recovery will take some time.

[Image: Renault]

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3 of 10 comments
  • V16 V16 on Oct 22, 2019

    Put the alliance aside, and find a tailor that befits a Chairman of an international automaker.

    • Inside Looking Out Inside Looking Out on Oct 22, 2019

      There is nothing wrong with him- Europeans dress like that. You Americans are behind the times as usual.

  • Jeff S Jeff S on Oct 22, 2019

    Americans consider a brown suit and tie not proper business attire but those of us that remember President Reagan who often wore brown suits. It appears that the suit is more taupe but the tie is definitely brown. "Taupe is a dark brown color between brown and gray. The word derives from the French noun taupe meaning "mole". The name originally referred only to the average color of the French mole, but beginning in the 1940s, its usage expanded to encompass a wider range of shades." Wikipedia Nissan's problems are more significant than a leader who wears a brown suit and tie.

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