Leaders of Renault, Nissan, Mitsubishi Motors agree on new
operating board
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 (March 13, 2019).
YOKOHAMA, Japan -- The heads of Renault SA, Nissan Motor Co. and
Mitsubishi Motors Corp. on Tuesday overhauled the leadership
structure of their auto-making alliance, looking for a fresh start
in the wake of the arrest and dismissal of Carlos Ghosn.
The companies said the old structure -- which Mr. Ghosn created
as alliance chairman -- was unwieldy and will set up an operating
board to replace it.
"In the existing setup we spent a lot of time, you know, to
report to many, many layers of each of our companies, and this
creates viscosity," said Renault Chief Executive Thierry Bolloré.
"And our clear will is to ensure we get rid of that viscosity."
The new board will meet every month in Paris or Tokyo and its
chairman will be Renault's new chairman, Jean-Dominique Senard. Its
other members will be the chief executives of the three auto
makers. The body replaces two Netherlands-based subsidiaries, one
of which linked Nissan and Renault, and the other Nissan and
Mitsubishi.
The Wall Street Journal reported the outline of the board on
Monday.
Tuesday's announcement marked an easing of tensions that arose
between Renault and Nissan after the arrest of Mr. Ghosn in Tokyo
on Nov. 19. The surprise move was prompted by a secret
investigation of his conduct by Nissan executives. Mr. Ghosn is
charged with violating two Japanese laws, one governing corporate
financial disclosures and the other barring corporate executives
from abusing their positions for personal gain. He has said he is
innocent and called the charges against him meritless.
The two companies also reached a deal on the status of Mr.
Senard at Nissan. Renault said it wouldn't seek to make him
chairman of the Japanese auto maker in place of Mr. Ghosn; instead,
the companies said they planned to make him Nissan vice chairman
after putting his nomination as director to a shareholder vote in
April.
Under the rules governing the alliance between Renault and
Nissan, the French auto maker can nominate one top Nissan
executive, a power that was used to install Mr. Ghosn as chairman
in the past. Nissan had indicated it would prefer that role no
longer be held by a Renault executive.
In December, Renault took Nissan to task in a series of letters
over the way Nissan investigated Mr. Ghosn. Nissan sought to
reassure its partner by sharing the results of its investigation
directly with Renault's board but was rebuffed.
At a joint news conference Tuesday in Yokohama, where Nissan is
based, Nissan Chief Executive Hiroto Saikawa said the new structure
solved many of his complaints about the alliance. Now, Mr. Saikawa
said, decisions would be made through consensus, with each alliance
member having an equal voice. Mr. Saikawa had complained that Mr.
Ghosn wielded too much power as the head of both Renault and
Nissan.
A spokesman for Mr. Ghosn, who was released on bail last week,
didn't have any immediate comment.
Mr. Ghosn remains a Nissan director and had sought to attend a
company board meeting on Tuesday ahead of the news conference -- a
request denied by a Tokyo court. Junichiro Hironaka, Mr. Ghosn's
lead attorney, said his client was concerned about Nissan.
"Leadership is needed, and that's what he is worried about," Mr.
Hironaka said.
Mr. Senard said replacing a primary decision maker with a
four-person board would improve cooperation. Previously, Mr. Ghosn
had outsize voting power under the rules governing the
Netherlands-based entity linking Renault and Nissan.
Renault has two representatives on the new board, compared to
one each from Nissan and Mitsubishi. Mr. Senard declined to detail
how disagreements would be settled. "I believe the consensus-based
structure is better than any rules about voting," he said.
The board plans to create a new structure for alliance projects,
such as joint development of vehicles. The companies will set up
teams that will report directly to the new board; under a structure
that Mr. Ghosn had begun to establish early last year such teams
reported to him alone as chairman of the alliance.
Nissan is awaiting proposals due this month from outside
advisers on changes to its corporate governance. Mr. Saikawa said
Renault has agreed to respect any changes Nissan makes to its
governance.
Analysts see Tuesday's announcement as a symbolic step for
partners who need to rebuild trust.
Many analysts have expressed doubts in the past about the actual
benefits that the companies gain from their partnership, pointing
to their relatively low profit margins. Renault and Nissan had an
operating profit margin of 6.3% and 4.8%, respectively, last fiscal
year. Toyota Motor Corp. had an operating margin of 8.2%.
The most contentious issue facing the alliance is the unbalanced
cross-shareholding structure, where Renault owns 43.4% of Nissan,
but Nissan holds only 15% of Renault. Also, Renault has three seats
on Nissan's board, while Nissan has two seats at Renault's and no
voting rights. The companies said the issue was not on their recent
agenda.
River Davis contributed to this article.
Write to Sean McLain at sean.mclain@wsj.com
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March 13, 2019 02:47 ET (06:47 GMT)
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