PARIS/TOKYO (Reuters) – Nissan wants more influence in its alliance with France’s Renault following the arrest of group Chairman Carlos Ghosn, arguing the structure does not adequately reflect the Japanese carmaker’s size and global sales.
Japan’s No.2 auto manufacturer has long felt like the junior partner in the alliance built by Ghosn over the last 19 years, since he rescued Nissan from near-bankruptcy. The alliance was extended to include Mitsubishi Motors in 2016.
But while Nissan is agitating for change, the French and Japanese governments talked up stability on Wednesday, saying they wanted to consolidate the alliance following Ghosn’s shock arrest on suspicion of financial misaccounting.
Nissan has said it will fire Ghosn as chairman on Thursday.
“We need to return to the original idea of a win-win relationship,” a long-time Nissan executive told reporters at a briefing in Tokyo, speaking on condition of anonymity. It should be “a more equal relationship than before.”
Nissan, while almost 60 percent bigger than Renault by sales, remains junior in their shareholding structure. While Renault holds 43.4 percent of Nissan, Nissan has just a 15-percent non-voting stake in Renault. Renault’s biggest shareholder is the French state with 15 percent.
The Nissan executive said a reduction of Renault’s stake in Nissan should be one option under consideration.
Ghosn, a Brazilian, Lebanese and French citizen, had personally shaped the alliance and pledged to consolidate it with a deeper tie-up, one that not all parties were convinced by. Before his arrest, the 64-year-old was exploring a full Renault-Nissan merger at the French government’s urging.
“We’d asked Carlos Ghosn to reinforce the alliance,” a French official told Reuters, adding that the government was still in the dark about the case against him.
“It’s difficult to see what’s behind all this – whether it’s all true, or whether it’s been swiftly brought out to scupper the alliance or take control.”
Auto analyst Thomas Besson of Paris brokerage Kepler was less equivocal. Nissan’s planned dismissal of its chairman “appears to be an indirect way of formally refusing a financial merger that Ghosn was advocating”, he said.
As well as geography and culture, the ties among the companies are complicated by the role of the French state, which enjoys double-voting rights in Renault.
In Japan there is concern France is ultimately seeking to take control of Nissan and Mitsubishi. In France, there are suspicions Ghosn may have been targeted so as to hinder French influence. Trust has been undermined on both sides.
“There is a feeling of crisis at the Ministry of Economy, Trade and Industry that at this rate Nissan and Mitsubishi will be seized by the French government,” said a senior source familiar with Japanese government thinking.
French Finance Minister Bruno Le Maire sought to ease the tensions, saying stability remained critical for both France and Japan. He said he wanted to see the evidence against Ghosn before reaching conclusions, and added that he would meet Japan’s economy and industry minister on Thursday for talks.
“At this stage, we do not have any evidence to support the accusations against Mr Carlos Ghosn,” Le Maire told reporters. “I would like to emphasize the Renault board’s request that Nissan share all the evidence available to it.”
Renault on Tuesday tapped its chief operating officer and a senior board member to fill in for Ghosn, but the board refrained from ousting him while waiting for details on the allegations – a decision that could buy more time for an accelerated, permanent succession process.
One of the world’s best-known auto industry executives, Ghosn bestrode the alliance, although he often said that his efforts to drive integration were hampered by the French government’s stake in Renault.
On Monday, Nissan CEO Hiroto Saikawa portrayed Nissan as a victim of Ghosn’s alleged misdeeds. But Nissan itself faces scrutiny over the financial misconduct case, with the Asahi newspaper reporting on Wednesday that prosecutors were weighing bringing a case against the Japanese automaker.
With Ghosn potentially gone from the picture, the future of the alliance is the subject of intense investor speculation. Mitsubishi Motors CEO Osamu Masuko said on Tuesday it may be hard to manage without Ghosn.
On Wednesday, Renault shares rose 1.3 percent after falling more than 9 percent this week. Nissan closed up 0.4 percent after falling nearly 6 percent a day earlier. Mitsubishi Motors closed down 1 percent after losing nearly 7 percent on Tuesday.
The success of the alliance, which helps the automakers develop products and control costs, is critical for the members at a time when the industry is buffeted by major changes in consumer tastes and rivals are investing billions in new growth areas like automated and internet-connected vehicles.
Given those considerations, the Japanese and French governments have backed stability in the alliance.
It “is a symbol of Franco-Japanese industrial success,” the top Japanese government spokesman said, calling for a “stable relationship” among the three automakers.
Graphic: Shares in Nissan, Renault, Mitsubishi Motors – tmsnrt.rs/2R08nep
Nissan said on Monday an internal investigation triggered by a tip-off from a whistleblower had revealed that Ghosn engaged in wrongdoing including personal use of company money and under-reporting for years how much he was earning.
Ghosn was arrested by Japanese prosecutors who said he and Representative Director Greg Kelly conspired to understate Ghosn’s compensation at Nissan over five years from 2010, saying it was about half the actual 10 billion yen ($89 million).
Ghosn and Kelly, who has also been arrested, have not commented on the accusations and Reuters has not been able to reach them. Kyodo News reported on Wednesday that the Tokyo District Court has decided Ghosn and Kelly would be detained for a further 10 days.
Japan’s Nikkei business daily reported on Tuesday that Ghosn had received share price-linked compensation of about 4 billion yen over a five-year period to March 2015 but that it went unreported in Nissan’s financial statements.
Reporting by Daniel Leussink, Sam Nussey and Elaine Lies in Tokyo and Laurence Front, Michel Rose, Gilles Guillaume and Inti Landauro in Paris; Additional reporting by Mayuko Ono and Taro Fuse; Editing by Luke Baker/ Mark Potter/Susan Fenton