Maintain Your Distance: Renault Sets Boundaries for the French Government
Renault finds itself reeling from pandemic-related shutdowns and industrial partnerships that proved more troublesome than helpful. Its alliance partner, Nissan, has been incredibly wary of any further integration with the French company — providing a major distraction within the alliance, even as the situation on the ground worsened. They’re now trying to reorganize the partnership while addressing the crippling financial situation they’ve both been confronted with.
Any talks of a merger (something Nissan clearly doesn’t want) have been suspended so the automakers can focus on reducing operating costs (layoffs, product reorganization, etc.). The duo also sought financial help to offset money lost back when we were all still collectively handling the pandemic in a super serious manner. While Nissan was interested in landing private loans, Renault hoped to get its aid via the French government. However, Chairman Jean-Dominique Senard made it clear that not all help will be welcomed, especially if it means nationalizing the company.
According to Reuters, Renault believes any further investment by the French government would be a waste of everyone’s time. “I’ve said that it isn’t on the table,” Senard told a hearing in the lower house of the French parliament on Thursday. “I have nothing against the state, I’m just saying that it’s not useful to spend taxpayer money to invest it in a company which needs to find its own resources.”
That said, the automaker would still like to see a state-guaranteed loan totaling 5 billion euros ($5.6 billion USD) fall into its pocket to help it through this troubled time.
Renault owns 43.4 percent of Nissan’s shares, while Nissan owns 15 percent of Renault and lacks voting privileges. France also happens to own 15 percent of Renault and often has something to say whenever the firm decides to make major decisions. That hasn’t gone over well with Japanese investors and a sizable chunk of Nissan’s leadership, making it one of the biggest reasons why they oppose continued integration within the alliance. It also played a role in kiboshing the proposed merger with Fiat Chrysler.
Spooked by French politics and a palpably displeased Nissan, FCA turned away from the deal to make a new arrangement with Renault’s French rival, PSA Group.
[Image: TY Lim/Shutterstock]
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