The News Wheel
No Comments

Renault and Nissan Partnership Sets New Boundaries

Decrease Font Size Increase Font Size Text Size Print This Page
Nissan-Renault CEO Carlos Ghosn

Nissan-Renault CEO Carlos Ghosn

Last month, we discussed the power struggle between the Nissan-Renault Alliance and the French government. Nissan, based in Tokyo, and Renault, based in Paris, had Board of Directors meetings to discuss the partnership and decide what the next steps were to limit government power while still keeping the partnership strong.

When both meetings concluded, the Nissan-Renault Alliance was left with the car equivalent of The Big Bang Theory’s often-referenced “Roommate Agreement”. The new guidelines smooths over some rough patches in the original agreement to ensure that the future of the partnership goes ahead as effortlessly as possible with minimal government interference.

France owns a portion of Renault’s stock, and holds significant voting power in the company. In turn, Renault owns a large stake in Nissan after it invested five billion dollars with the automaker was struggling in 1999. Renault sent 23 French executives, including current CEO Carlos Ghosn, to Japan to help Nissan pick itself up at that time. Theoretically, if major Nissan executive resigns, it’s possible that the French government, through Renault, could choose a new executive.

The latest agreements between the automakers seek to prevent French officials for making decisions for Nissan, while still following French law as it applies to Renault. The three main points of the agreement state that:

  • The French government will acquire double voting rights in Renault as required by French law, with a separate agreement between Renault and France capping the government’s voting rights somewhere between 17.9 and 20 percent, except in special circumstances that only have an effect on Renault.
  • Nissan will not seek more voting rights than it currently has in Renault.
  • Renault and the French government will have no control over Nissan’s governance.

While these restrictions might look more like a break-up note than a love letter, the fact that the automakers are working hard to make shareholders confident in the partnership is encouraging for its future.

News Source: AutoBlog