“I don’t think you’re going to see it this year or next,” Ghosn, chairperson and chief executive of the Renault-Nissan-Mitsubishi alliance, said yesterday. “Lots of mergers collapse and destroy value - the strength of any company is the ability to motivate people, and how are you going to do that if some of these people consider themselves second-class citizens.”
Renault and Nissan are discussing ways to strengthen their lopsided two-decade-old alliance, including a possible merger, as the industry shifts to meet new challenges in an era of self-driving and electric vehicles. The talks are delicate, with Nissan seeking to gain more influence in crucial operations such as product development. The companies are also mapping out the future of the tie-up.
While Ghosn and Nissan chief executive Hiroto Saikawa, both 64, are keen come to an agreement before they retire, the new structure may not be in place before they leave. Ghosn is aiming for a combination that would help pool resources at a time of record outlays for new technology and to face down new competitors like Uber Technologies.
Reaching an agreement could be tough. Saikawa has downplayed the need to merge while saying he wants to keep the alliance intact. A decision on the alliance may be made within a year, he said. Ghosn has said the Renault-Nissan-Mitsubishi alliance is looking at several options, including a merger, to help deepen the tie-up into something “irreversible”.
The partnership has a Byzantine structure that can be confusing. Nissan holds a 15percent stake of Renault and no voting rights. Renault, with smaller returns and less valuable than Nissan, has 44percent of Nissan and can vote on corporate matters. In 2016, Ghosn added Mitsubishi to the mix after the company was caught falsifying mileage estimates for several of its vehicles. Complicating matters, the French government owns 15percent of Renault, making it the largest shareholder.