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Nissan CEO Says He'll Step Down After Ghosn Resigns From Renault

Jan. 25, 2019
Hiroto Saikawa is ready to “pass the baton” in coming months after taking care of his top priority -- reforming the poor governance he says weakened the Japanese carmaker.

The strained two-decade marriage of Renault SA and Nissan Motor Co. is about to get a fresh start.

Within hours, the two main antagonists in the crisis that’s paralyzed the world’s biggest automotive alliance have said they’re leaving the stage. Carlos Ghosn, 64, resigned as chairman and chief executive officer of Renault, which finally cast the auto-industry luminary aside -- more than two months after he was jailed in Japan on allegations of financial misdeeds.

In an unexpected twist, Nissan CEO Hiroto Saikawa, a former protege of Ghosn who led the charge against his former boss, said he too intends to step down. The 65-year-old is ready to “pass the baton” in coming months after taking care of his top priority -- reforming the poor governance he says weakened the Japanese carmaker.

Renault’s decision to abandon its leader, and the prospect that Saikawa could soon hand over the reins, may help remove some of the mistrust that’s built up on both sides of the Franco-Japanese alliance. Before his arrest, Ghosn’s chairmanship at the companies kept a lid on tension and prevented clashes from bursting into view. Now it will be up to an outgoing Saikawa and Jean-Dominique Senard, the 65-year-old Michelin CEO named by Renault on Thursday to take over as chairman and manage the French carmaker’s relationship with Nissan and with the alliance.

“It’s not a bad idea that the old team goes and new people come in,” said Pierre Quemener, an analyst at MainFirst Bank AG. “This could be sort of a new beginning, not the end of the alliance.”

Shares of Nissan advanced 2.2% at 10:42 a.m. in Tokyo, trimming the losses since Ghosn’s Nov. 19 shock arrest to about 9%. Renault is down by a similar amount after rising 1.6% on Thursday in Paris.

Senard is backed by France, the most powerful shareholder of Renault. His appointment could mean he will be more open to politicians’ input than Ghosn, who sometimes clashed with the government. The new Renault chairman will join Nissan’s board and is tasked with proposing any changes to the structure of the alliance.

“Hopefully he takes his time to speak with a wide range of people before setting a strategy,” said Janet Lewis, a Tokyo-based analyst with Macquarie Group Ltd. “He needs to gain trust with the leadership of both Nissan and Renault, and needs to ensure he is not being viewed as a mouthpiece for the French government.”

Saikawa praised Senard as “someone I respect fully.” Saikawa told reporters Friday that the two spoke on the phone after Senard’s appointment, and that he told Senard he is looking forward to working together.

However, the Nissan CEO also hinted at potential areas of friction as the two sides attempt to repair their partnership, which also includes smaller Mitsubishi Motors Corp.

The executive said now wasn’t the time to discuss a full merger. He has opposed deeper integration of the carmakers, an idea that’s been pushed by the French government as it gives the appearance of seeking to make permanent France’s more powerful position within the alliance.

Renault owns 43% of Nissan with voting rights. France owns a 15% stake in Renault and has extra voting power, which gives the government an indirect say in decisions that sometimes affect Nissan. Nissan has a 15% non-voting stake in Renault.

“For Nissan, it’s a good thing for the company for Ghosn to be gone,” said Koji Endo, senior analyst at SBI Securities. “But there are many concerns as we can’t see the shape of the alliance.”

Under Ghosn, developers and factories competed for resources and the assignment of new car models, creating a climate of suspicion at times.

The view from Renault is that Nissan has boasted cars with fresher designs and hot-selling crossover vehicles like the X-Trail and the Qashqai, something that the French carmaker required years to replicate. Nissan also pushed into the important Chinese market under Ghosn’s watch, while Renault has little presence there. Nissan relies on Renault for better access to the vast European market.

For all its challenges, the Renault-Nissan alliance is years ahead of other partnerships that are just forming -- Ford Motor Co. and Volkswagen AG, for instance, and Daimler AG and BMW AG, said Demian Flowers, an analyst with Commerzbank AG in London. Automakers are realizing they need to team up to “future proof” the business, he said.

“Right now, it’s very difficult for them to do anything,” Flowers said. “They’re stuck in a stalemate. They should be out looking for other people to join the alliance who they can develop this expensive stuff with. None of that’s going to happen while we’re all sitting having an argument while this guy’s sitting in jail.”

By Tara Patel, Ma Jie and Gabrielle Coppola

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Licensed content from Bloomberg, copyright 2016.

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