Renault to Extend Ghosn's Contract -- WSJ

By William Boston

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 (February 3, 2018).

Renault SA is expected to extend the contract of Carlos Ghosn at its next shareholder meeting, allowing the 63-year-old chief executive more time to firm up Renault's alliance with Nissan Motor Co. and Mitsubishi Motors Corp., according to a person familiar with the situation.

Mr. Ghosn, who also serves as chairman of Renault, Nissan and Mitsubishi, was slated to step down as Renault CEO in June, when his current four-year contract expires. But Mr. Ghosn is concerned about the state of the three-way alliance, the person said, and wants more time to put it on surer footing.

Renault's board is expected to agree on Feb. 15 to extend Mr. Ghosn's contract, pending shareholder approval at the next annual general meeting in June.

Renault will also appoint a deputy or chief operating officer to free Mr. Ghosn from much of the operational oversight at Renault, allowing him to focus more on strategic issues and the deepening of the French-Japanese alliance, the person said.

News of the decision was first reported by the French daily Le Figaro.

The three-way alliance is unique in the global auto industry, where many industry leaders soured on the idea of megamergers after the calamitous divorce of Germany's Daimler AG and Chrysler that eventually led to the latter's rescue by Fiat in the form of Fiat Chrysler Automobiles NV.

The alliance is based on a cross-shareholding arrangement that allows its members to share costs and technology as if they were part of a single company to compete with global rivals Volkswagen AG and Toyota Motor Corp.

With the addition of Mitsubishi last year, the alliance sold 10.6 million vehicles world-wide, pulling into second place ahead of Toyota, which sold 10.4 million vehicles. Volkswagen -- which includes the VW, Audi, Porsche and other brands -- sold 10.7 million vehicles world-wide to remain the global sales leader..

Despite its successes, the Renault-Nissan relationship has been fraught with rivalries and disagreement over technology. Some Nissan shareholders have complained that the Japanese operation appeared to be a wholly owned subsidiary of Renault. Analysts have wondered whether the alliance would even survive after Mr. Ghosn's departure.

--Sean McLain contributed to this article.

Write to William Boston at william.boston@wsj.com

(END) Dow Jones Newswires

February 03, 2018 02:47 ET (07:47 GMT)

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