Nissan says Renault decision regrettable . . .

Riley Riley

THE two-decade-old partnership between Renault and Nissan was plunged into fresh crisis this week as the French carmaker’s demand for a greater say in Nissan’s new governance system drew rare public censure by the Japanese firm.

Reuters says Renault, which owns 43.4 per cent of the Japanese brand, signalled that it would block Nissan from formally adopting an overhauled governance structure at a June 25 shareholder meeting — unless Renault received representation on new Nissan committees.

The demand, conveyed in a letter from Renault Chairman Jean-Dominique Senard just weeks before the meeting, could scuttle the new structure, created after months of deliberation by an outside committee and previously supported by Senard.

Nissan responded in some of its frankest language yet against its top shareholder, calling the demand “most regrettable”.

“Nissan has received a letter from Renault indicating intention to abstain from voting,” Nissan said in a statement.

“Nissan finds Renault’s new stance on this matter most regrettable, as such a stance runs counter to the company’s efforts to improve its corporate governance.”

The rift lays bare the deep strain between the two car companies, whose alliance has been under enormous pressure since the arrest of former Chairman Carlos Ghosn in November.

What’s at stake now may be even bigger than their vast alliance, which includes Mitsubishi Motors.

Renault and Fiat Chrysler Automobiles (FCA) are looking for ways to resuscitate their collapsed merger plan and secure Nissan’s approval for that deal.

Nissan is poised therefore to urge Renault to significantly cut its 43.4 per cent stake in the company.

By abstaining from the vote, Renault would effectively block the new governance system — which includes three committees — as adoption requires two-thirds approval.

Nissan recently said it would abstain from voting on the FCA-Renault merger, although both FCA and Renault later blamed the failure of that deal squarely on the French government.

French Finance Minister Bruno Le Maire said it was up to the management of both companies to solve their problems.

The French government owns 15 percent of Renault.

The two companies have struggled to repair their relationship after Ghosn’s arrest exposed simmering tensions, including Nissan’s long-held concerns about the alliance’s capital structure.

Nissan also appears to have been largely left in the dark on the merger discussions between Renault and Fiat Chrysler, which had attempted to join forces to create the world’s third-largest carmaker before talks fell apart last week.


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