Auto Partners Move to Ease Discord -- WSJ
30 November 2019 - 7:02PM
Dow Jones News
By Nick Kostov
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (November 30, 2019).
PARIS -- Auto-making partners Renault SA, Nissan Motor Co. and
Mitsubishi Motors Corp. plan to appoint a general secretary to
coordinate coming projects and help restore momentum lost since the
arrest and dismissal of alliance founder Carlos Ghosn.
The companies said Friday they had agreed on ways to strengthen
cooperation, including "action plans to maximize the contribution
of the alliance to support each company's strategic plan and
operating profit." The programs will include such initiatives as
aligning production capabilities, sharing vehicle platforms and
advancing on-the-road digital connectivity, according to people
familiar with the matter.
The announcement comes as Renault is settling on a shortlist of
three or four names for its vacant CEO position, according to
people familiar with the search. Leading candidates include Luca de
Meo, who heads Volkswagen AG's Seat brand, Patrick Koller, chief of
French auto-parts supplier Faurecia SE, and Clotilde Delbos,
Renault's chief financial officer and interim CEO, one of the
people said.
With the emergence of electric vehicles and ever-increasing
automation, the auto industry is undergoing a radical
transformation requiring heavy investments in technology. Though
cost-sharing a pillar of the three-company alliance, its
dysfunction has become a drag on its members' performance and share
price.
Shares of Nissan are off by a third since Mr. Ghosn's arrest and
its profit for this fiscal year is set to drop more than two-thirds
from a peak two years ago. Renault's share price has fallen more
than 30% over the same period, and the French car maker last month
cut its revenue and profit guidance for the year.
For Renault Chairman Jean-Dominique Senard, Friday's
announcement marks an easing of tensions that worsened with Mr.
Ghosn's arrest in November last year. The former chairman of both
Renault and Nissan was charged in Japan with financial misconduct.
Mr. Ghosn says he is innocent.
The French and Japanese auto makers say they continue to work
well together. However, disagreements have repeatedly become public
and cooperation in some areas has ground to a halt, according to
executives at both companies, which also have endured management
turnover.
Nissan's departing chief executive, Hiroto Saikawa, told the
Financial Times recently that strong nationalist forces within
Nissan had been unleashed in the wake of Mr. Ghosn's arrest, and
that some at the Japanese auto maker had wanted to roll back its
20-year alliance with Renault.
The thorniest issue paining the alliance is its unbalanced
cross-shareholding arrangement. Renault owns 43.4% of Nissan, but
Nissan holds only a 15% nonvoting stake in the French company.
When Mr. Senard arrived at Renault in January, one of his first
moves was to rearrange oversight of the auto-making alliance. In
March, he replaced a structure created by Mr. Ghosn -- and which
gave the auto titan a tiebreaking vote -- with a slimmed-down
operating board. It comprises the CEOs of Renault, Nissan and
Mitsubishi, as well as Mr. Senard, and makes decisions based on
unanimity.
Mr. Senard has been bolstering the new board so the car makers
can save money by working together and sharing parts and platforms.
The operating board meets each month, alternating between France
and Japan.
On Friday, the companies said they would appoint a general
secretary to coordinate several common projects. The executive, who
will be named in the coming days, will report to the three
companies' CEOs as well as to the board overseeing the
alliance.
In recent months, a number of executives connected with Mr.
Ghosn's tenure, including the CEOs of Nissan and Renault, have been
ousted or sidelined, and some top executives believe the result
will be an end to the infighting.
At Nissan, a CEO triumvirate will take charge as of Dec. 1,
while Renault hopes to appoint its new chief in the coming
weeks.
Write to Nick Kostov at Nick.Kostov@wsj.com
(END) Dow Jones Newswires
November 30, 2019 02:47 ET (07:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
Mitsubishi Motors (PK) (USOTC:MMTOY)
Historical Stock Chart
From Aug 2024 to Sep 2024
Mitsubishi Motors (PK) (USOTC:MMTOY)
Historical Stock Chart
From Sep 2023 to Sep 2024