January 24, 2019 / 11:00 AM / 3 months ago

Breakingviews - Ghosn successors may further strain Nissan ties

Carlos Ghosn, Chairman and CEO of the Renault-Nissan Alliance, attends an interview with Reuters at Nissan's global headquarters in Yokohama, Japan, February 23, 2017. REUTERS/Toru Hanai

LONDON (Reuters Breakingviews) - Carlos Ghosn is gone but the same cannot be said for tensions in the alliance between Nissan (7201.T) and Renault (RENA.PA). More than two months after his arrest in Japan for alleged financial misconduct, Ghosn on Wednesday night resigned as Renault chief executive and chairman, French Finance Minister Bruno Le Maire said. Successors may feed Nissan’s paranoia about political meddling.

Nissan, 43 percent-owned by Renault, accused Ghosn of under-reporting his salary and ousted him as chairman in November. Yet Renault merely appointed interim replacements. Now that Ghosn has quit, Michelin’s (MICP.PA) Jean-Dominique Senard and Ghosn’s former deputy Thierry Bolloré have been proposed as permanent chairman and CEO respectively. The decks therefore seem clear for negotiations on the carmakers’ future.

Senard and Bolloré are also eminently qualified to run the French group’s operations, having extensive experience in the industrial sector. Michelin’s annualised total shareholder return over the last five years is almost 7 percent, using Refinitiv data, compared with Renault’s 1 percent. Most importantly, both are members of the Paris business establishment and have the implicit support of the French state, which is Renault’s largest shareholder with a 15 percent stake.

That political association could, however, reduce the chances of a longer-term resolution to Renault and Nissan’s tension. The Japanese side is understandably concerned about the influence of France’s government, which in the past pushed Ghosn to make the alliance “irreversible”, potentially through a merger. At least Ghosn, who was Nissan chairman and a significant shareholder in the Japanese group, had a foot in both camps. The risk is that Nissan views Senard and Bolloré as the voice of the French government, even more so than the man they succeed. That would make it harder to come to an agreement on what to do next.

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