RNO Renault SA

Auto maker puts three executives in charge, with its China chief becoming CEO

By Sean McLain 

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 (October 9, 2019).

YOKOHAMA, Japan -- Nissan Motor Co. named a new chief executive and said the company would be led by a three-person team that will try to reverse a profit slide and repair relations with alliance partner Renault SA.

"Looking at the current situation of Nissan, strong leadership is expected, but there are two sides of the coin on strong leadership," said Yasushi Kimura, Nissan's board chairman. "We thought group leadership, where they can support each other, will be more transparent and can make fairer decisions."

The board tapped as CEO the head of Nissan's China business, Makoto Uchida. Ashwani Gupta, currently chief operating officer of alliance member Mitsubishi Motors Corp., will become chief operating officer, while an executive who has been overseeing turnaround efforts, Jun Seki, will become vice chief operating officer and report to Mr. Gupta. The three are set to assume their roles by Jan. 1.

Nissan's profit has been shrinking, hit by falling sales around the world. The company is slashing production and has said it plans to cut 12,500 jobs globally. At the same time, Nissan's relationship with Renault has been strained by battles over the direction of the 20-year-old alliance.

The leadership decision, coming weeks ahead of the board's self-imposed end-of-October deadline, reflected its desire to act quickly through a compromise. All three executives were on the board's short list of nominees for the CEO job, people familiar with the board's discussions have said. Directors had initially planned to debate who was the best candidate over the course of this month. "The consensus was that sooner was better," Mr. Kimura said.

Each person had a different appeal to the board, said Masakazu Toyoda, the director who oversaw the CEO search. Mr. Uchida, 53, oversees Nissan's China business, one of its most important markets. He also has an international outlook, which the board thought was important, Mr. Toyoda said. Mr. Uchida spent some of his childhood outside Japan and joined Nissan after working for more than a decade at a trading company because he admired the Renault-Nissan alliance, Mr. Toyoda said.

Mr. Gupta, 49, has worked at all three alliance partners, and held a senior alliance position overseeing cooperation between the three car makers on trucks and sport-utility vehicles.

Mr. Seki, 58, was tapped by former CEO Hiroto Saikawa to oversee Nissan's recovery efforts. Mr. Saikawa, a longtime lieutenant to former Nissan Chairman Carlos Ghosn, resigned last month. Nissan declined to make Messrs. Uchida, Gupta and Seki available for comment.

The group-leadership approach could address dueling concerns from some at Nissan and Renault. On Nissan's side, some were worried the CEO search was being used as a way for Renault to seize control of its partner, said people familiar with the board's discussions. Conversely, Renault people were concerned the next Nissan CEO, if chosen from among the Japanese car maker's veteran executives, would seek greater independence from Renault, these people said.

One of the people called the choice a victory for the alliance and said, "It shows Nissan has understood that it's harder without the alliance."

Some board members had sought the ouster of Nissan's vice president in charge of legal affairs, Hari Nada, at Tuesday's meeting. The board was informed that a new executive committee at Nissan determined Mr. Nada would no longer be in charge of legal affairs, said some of the people familiar with the board's discussions.

Nissan declined to comment on the board's discussions and declined to make Mr. Nada available for comment.

Repairing relations between the alliance members will be a priority for the incoming chief executive, Mr. Uchida, who will sit on an alliance operating board with the heads of Renault and Mitsubishi.

Alliance decision making has slowed since the arrest of Mr. Ghosn, the former alliance head, who faces charges of financial wrongdoing in Japan. Mr. Ghosn has said he is innocent of all the allegations. Joint management teams created by Mr. Ghosn have been left with little to do, as Nissan sought to create an arm's-length relationship with Renault.

An even thornier question is the future structure of the alliance. Renault and Nissan reopened secret negotiations this summer on a change to the cross-shareholding relationship that formally binds the companies together. Nissan has long complained that the relationship is weighted in Renault's favor. Renault owns a 43.4% stake in Nissan, while Nissan owns a 15% nonvoting stake in Renault.

--Nick Kostov contributed to this article.

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Write to Sean McLain at sean.mclain@wsj.com

(END) Dow Jones Newswires

October 09, 2019 02:47 ET (06:47 GMT)

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