Business / Corporate

Nissan, Renault and Mitsubishi agree to be ‘fully committed’ to alliance

Kyodo

The top executives of Nissan Motor Co., Renault SA and Mitsubishi Motors Corp. agreed Thursday to remain “fully committed” to their three-way alliance, even after the arrest of its powerful leader Carlos Ghosn for alleged financial misconduct.

The alliance has “achieved unparalleled success in the past two decades,” said a joint message by the three automakers following the talks between Nissan CEO Hiroto Saikawa, Mitsubishi Motors CEO Osamu Masuko and Renault’s acting CEO Thierry Bollore via video conference.

The leadership vacuum at one of the world’s largest automaker groups is turning into a power struggle between Nissan, which wants to review the alliance to have more say, and Renault, whose biggest shareholder, the French government, wants a person from the French automaker to lead the group.

Ghosn was dismissed as chairman at both Japanese automakers but remains CEO and chairman of Renault following the 64-year-old’s arrest by Tokyo prosecutors on Nov. 19.

Nissan believes the current alliance’s structure is not equal as its largest shareholder Renault has a bigger say. The French government has a stake of around 15 percent in Renault.

Even though Nissan has contributed about 50 percent of the French automaker’s net income in recent years, Renault owns a 43.4 percent stake in Nissan, which holds a 15 percent stake in its French peer but without voting rights and a 34 percent stake in Mitsubishi Motors.

Ghosn, initially dispatched by Renault in 1999 as part of a capital tie-up between the two companies to save Nissan from bankruptcy, was the crucial linchpin of the complex tripartite partnership before his sudden arrest. Smaller rival Mitsubishi joined the group in 2016.

With the focus on who will lead the alliance in place of Ghosn, under the existing accord between Nissan and Renault, the CEO and chairman is to be decided by the French carmaker.

Ghosn had reportedly been seeking a full merger of the three automakers led by Renault, while executives at Nissan have insisted on maintaining the Japanese company’s independence.

Ahead of the meeting on Thursday, French Finance Minister Bruno Le Maire reiterated Tuesday on TV that it is desirable for the alliance to continue to be led by a person from Renault and he hopes for no change in the current power balance of the alliance, including the cross-shares holdings structures.

Ghosn was arrested for allegedly underreporting his remuneration by around ¥5 billion ($44 million) for five years through fiscal 2014, even though he received nearly ¥10 billion during that period. Greg Kelly, former Nissan representative director, was arrested along with Ghosn on suspicion of conspiracy.

Both Ghosn and Kelly have denied the charges, according to sources close to the matter.