RNO Renault SA

By Nick Kostov 

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 (November 30, 2019).

PARIS -- Auto-making partners Renault SA, Nissan Motor Co. and Mitsubishi Motors Corp. plan to appoint a general secretary to coordinate coming projects and help restore momentum lost since the arrest and dismissal of alliance founder Carlos Ghosn.

The companies said Friday they had agreed on ways to strengthen cooperation, including "action plans to maximize the contribution of the alliance to support each company's strategic plan and operating profit." The programs will include such initiatives as aligning production capabilities, sharing vehicle platforms and advancing on-the-road digital connectivity, according to people familiar with the matter.

The announcement comes as Renault is settling on a shortlist of three or four names for its vacant CEO position, according to people familiar with the search. Leading candidates include Luca de Meo, who heads Volkswagen AG's Seat brand, Patrick Koller, chief of French auto-parts supplier Faurecia SE, and Clotilde Delbos, Renault's chief financial officer and interim CEO, one of the people said.

With the emergence of electric vehicles and ever-increasing automation, the auto industry is undergoing a radical transformation requiring heavy investments in technology. Though cost-sharing a pillar of the three-company alliance, its dysfunction has become a drag on its members' performance and share price.

Shares of Nissan are off by a third since Mr. Ghosn's arrest and its profit for this fiscal year is set to drop more than two-thirds from a peak two years ago. Renault's share price has fallen more than 30% over the same period, and the French car maker last month cut its revenue and profit guidance for the year.

For Renault Chairman Jean-Dominique Senard, Friday's announcement marks an easing of tensions that worsened with Mr. Ghosn's arrest in November last year. The former chairman of both Renault and Nissan was charged in Japan with financial misconduct. Mr. Ghosn says he is innocent.

The French and Japanese auto makers say they continue to work well together. However, disagreements have repeatedly become public and cooperation in some areas has ground to a halt, according to executives at both companies, which also have endured management turnover.

Nissan's departing chief executive, Hiroto Saikawa, told the Financial Times recently that strong nationalist forces within Nissan had been unleashed in the wake of Mr. Ghosn's arrest, and that some at the Japanese auto maker had wanted to roll back its 20-year alliance with Renault.

The thorniest issue paining the alliance is its unbalanced cross-shareholding arrangement. Renault owns 43.4% of Nissan, but Nissan holds only a 15% nonvoting stake in the French company.

When Mr. Senard arrived at Renault in January, one of his first moves was to rearrange oversight of the auto-making alliance. In March, he replaced a structure created by Mr. Ghosn -- and which gave the auto titan a tiebreaking vote -- with a slimmed-down operating board. It comprises the CEOs of Renault, Nissan and Mitsubishi, as well as Mr. Senard, and makes decisions based on unanimity.

Mr. Senard has been bolstering the new board so the car makers can save money by working together and sharing parts and platforms. The operating board meets each month, alternating between France and Japan.

On Friday, the companies said they would appoint a general secretary to coordinate several common projects. The executive, who will be named in the coming days, will report to the three companies' CEOs as well as to the board overseeing the alliance.

In recent months, a number of executives connected with Mr. Ghosn's tenure, including the CEOs of Nissan and Renault, have been ousted or sidelined, and some top executives believe the result will be an end to the infighting.

At Nissan, a CEO triumvirate will take charge as of Dec. 1, while Renault hopes to appoint its new chief in the coming weeks.

Write to Nick Kostov at Nick.Kostov@wsj.com

(END) Dow Jones Newswires

November 30, 2019 02:47 ET (07:47 GMT)

Renault (EU:RNO)
Historical Stock Chart
From Mar 2024 to Apr 2024

Renault (EU:RNO)
Historical Stock Chart
From Apr 2023 to Apr 2024