Business / Corporate

Carlos Ghosn scandal leaves room at Renault's helm — and begs questions about Nissan alliance's future

AFP-JIJI

Behind bars in Japan, Carlos Ghosn has already been stripped of his leadership roles at Nissan Motor Co. and Mitsubishi Motors Corp. — leaving questions for Renault, the third carmaker in the alliance, over who should steer the French company.

In the wake of the allegations of financial misconduct against Ghosn, tensions are also running high between Renault SA and its Japanese partners.

What lies ahead for Renault, a company which Ghosn grew into an industrial behemoth as part of the powerful alliance with Nissan and Mitsubishi?

Who could replace Ghosn?

Ghosn is still Renault’s CEO — but with even his own lawyers acknowledging he could remain in jail awaiting trial for months, a replacement is needed.

“It’s a foregone conclusion,” a source close to the matter said.

A former senior executive said Renault was “in the process of recruiting Ghosn’s replacement,” while a third source said: “There will be a replacement, we just need to be a little patient.”

Thierry Bollore, Renault’s chief operating officer, has temporarily taken the reins and would be Ghosn’s natural heir.

Choosing Bollore, a Frenchman with plenty of experience in Asia, would allow for some continuity in a company that has been badly rocked by the Ghosn affair.

But several other names are also circulating, including Didier Leroy, executive vice president at Toyota, and Michelin CEO Jean-Dominique Senard.

Senard’s posting at the top of the tire-making giant is coming to an end in May and he is well-liked by the French government, which with a 15 percent stake is Renault’s biggest shareholder. One plausible scenario would see him become chairman of the board, while Bollore would remain on as chief operating officer.

Groupe PSA chief Carlos Tavares, whom Ghosn ousted from Renault in 2013 for daring to hint that he wanted to run the firm, is also being discussed as a possible successor.

Several senior French officials have been dispatched to Tokyo for talks with Nissan chief Hiroto Saikawa, which could speed up the naming of Ghosn’s replacement.

A change in structure?

Until his arrest Ghosn was simultaneously CEO of Renault and the alliance, as well as board chairman at Nissan and Mitsubishi.

Several sources that say it will not be necessary for his replacement at Renault to also lead the Renault-Nissan-Mitsubishi Alliance, which is based in the Netherlands.

Renault’s CEO role could even be split between an executive general manager and a board chairman, in a structure used by other French companies partly owned by the state.

One industry insider said it was “normal” for the recruitment process to take time, adding that “the streets are not overflowing” with potential leaders of firms this large.

French Finance Minister Bruno Le Maire stressed that “there is a pilot in the plane” in Ghosn’s absence in the form of Renault’s temporary leadership.

Can the alliance survive?

Ghosn had been seen as the glue binding together the complex three-way structure that makes up the world’s top-selling auto company.

Nissan says the alleged financial misconduct came to light through a company whistleblower — a source of angst at Renault, which has denounced what it called a “deliberately orchestrated destabilization campaign.”

The documents passed to investigators have targeted figures close to Ghosn including Mouna Sepehri, Renault’s head of legal affairs and communications.

Resentment has long been brewing in Japan over the structure of the alliance, which some say gives Renault an undue share of Nissan’s profits.

Some within the French company suspect Nissan of seeking to tip the balance of power within the alliance to the detriment of Renault, which currently holds 43 percent of its Japanese partner after saving it from collapse in the early 2000s.

Nissan CEO Hiroto Saikawa dismissed this as “absurd,” saying: “Look at the evidence. It’s serious.”

He insisted he was committed to the alliance and had no immediate plans to seek to change its structure.

One Paris source suggested changes would be necessary in the top ranks of Nissan for the Franco-Japanese partnership, forged in 1999, to continue.

Another source said it was inevitable that there would be “battles for influence” and “score-settling,” but insisted the alliance would live on to see another day.