Cars and Drivers

Renault, Nissan, Mitsubishi 'Fully Committed' to Alliance Despite Ghosn Arrest

Paul Ausick

Published: November 29, 2018 8:25 am

Last Updated: January 11, 2020 2:21 pm

In a terse statement issued Thursday morning following a meeting in Amsterdam, the boards of directors of Groupe Renault, Nissan Motor and Mitsubishi Motors, collectively known as the Alliance, said that they “remain fully committed to the Alliance.” Period. End of story.

What the Alliance members did not say was how one of the world’s largest automakers would be run. Since the arrest in Japan of Carlos Ghosn on allegations of tax evasion, Nissan and Mitsubishi have replaced Ghosn as chair of the companies, while Renault has appointed its chief operating officer, Thierry Bolloré, to take over Ghosn’s chief executive officer duties while he is “temporarily incapacitated.” Lead independent director Philippe Lagayette serves as acting chair of Renault’s board.

Ghosn both conceived of and knitted together the Alliance in which Renault owns more than 43% of Nissan and Nissan owns 15% of Renault. Nissan also owns a controlling stake of 34% in Mitsubishi. The largest stakeholder in Renault is the French government.

Earlier this week, Bloomberg reported that the French government continues to insist that Renault’s chair should lead the Alliance. Nissan, perhaps unsurprisingly given Renault’s controlling stake in the Japanese firm, shares that view.

In its most recent annual report, Renault reiterates how the Alliance makes decisions:

[S]ince 2002, [the Alliance] has had decision-making and recommendation powers that it exercises in consensus with each partner and in compliance with their interests.

Having a single board chair makes reaching a consensus much easier, and Ghosn’s fall from grace may well fracture the Alliance’s unitary leadership. Nissan already has appointed a committee to name an interim chair by the time of its next scheduled board meeting on December 17, according to an unnamed Bloomberg source.

Nissan sees the turmoil caused by Ghosn’s detention as an opportunity to redress an imbalance in decision-making at the Alliance. Renault, and the French government, currently dominate and are not likely willing to give up their grip on making operational decisions.

One possible outcome is that the vice chairman of the Alliance, Nissan CEO Hiroto Saikawa, will be elevated to chair. Another is that Japan will release Ghosn when his current detention period ends Friday, although Japanese authorities could seek a 10-day extension. In any event, Ghosn is unlikely to sit in jail indefinitely.

If Ghosn is released, Renault then has to choose between putting him back in the driver’s seat or continuing with the temporary leadership changes or making the temporary changes permanent. That’s when things promise to get really interesting for the Alliance. Stay tuned.