The sudden fall of Carlos Ghosn seems to lead to a struggle for power between Renault SA and Nissan Motor Co. above the alliance she had been watching for two decades.
As both sides say they are engaged in the partnership, they are already preparing for a battle to control the largest carmaker in the world, people who are familiar with their discussions have said. And with the French and Japanese governments, who also want to protect their own interests, it can become one of the most difficult corporate shit of the last times.
Gun's arrest in Japan for suspected financial misconduct opens the door to Nissan to try to overcome the balance of the alliance while Renault is seeking to resist any effort to undermine its position, the people said. From the beginning, Renault has been the strongest partner, but over the years circumstances have changed: Nissan has already sold one third more cars a year and is making more profits.
"The crisis has just begun for the Alliance," said Kenneth Curtis, President of Stafford Investment Holdings, investment, private equity and commodity group. "All the troubles will now come to the surface."
This story is based on discussions with more than half a dozen people close to companies who want not to be identified to discuss personal issues. A Renault representative refused to comment as a Nissan employee did not return immediately to a call comment.
The Nissan Board expelled Ghosn as chairman on Thursday, three days after his arrest, a stunning drop in grace for CEO, which was won by the rescue of the carmaker in 1999. With Ghosn's release, Chief Executive Officer Hiroto Saikawa is already planning a review of to make it fairer for the Japanese automaker, said people familiar with the plans. Nissan has long been annoyed by the French government intervening in the alliance, a man said.
The French company will resist any sudden steps to restructure the relationship, other acquaintances said. Possible scenarios include attracting another partner, such as German Daimler AG, to strengthen the Alliance's European shoulder, two people said, although such plans are not currently under discussion. Daimler and Renault-Nissan began working together eight years ago on small cars and delivery vans. Tripartite cooperation is supported by a cross-share of 3.1%.
France can also take advantage of Toyota's executive vice president. Didier Leroy, acting as an intermediary. Frenchman and former CEO of Renault, 60, is a well-known figure in Japan. Leroy refused to comment.
The alliance meeting is scheduled for next week in Amsterdam, which may include Daimler, said a person familiar with the matter.
Renault, with the French state as the largest shareholder, has a 43 percent share of Nissan's vote, which in turn holds only 15 percent of Renault, with no voting rights. This imbalance has caused Nissan to suffocate for years.
Recently, the structure has become increasingly controversial in Japan due to improved Nissan performance. Nissan sold approximately 5.8 million cars last year – compared to just 3.7 million for Renault – and provides connections with China, where Renault has only a small presence, and the US where the French car manufacturer is absent.
Under Japanese corporate law, Renault's voting rights could be revoked if Nissan increased its stake to more than 25% in the French carmaker. According to French rules, if Renault cuts its share in Nissan below 40%, then it will help the Japanese automaker to get a vote in the French company.
Prior to his arrest this week, Gemn was busy working on plans to make the alliance "permanent", possibly through a merger, as reported by Bloomberg in March. This impetus was faced with resistance from Nissan, including Saikvawa, his former protégé.
Both sides agree that the future of the partnership is more important than the fate of Goshen, who remains in the same prison as the death penalty prisoners of the Japanese cult of the 1995 Tokyo Sacred Metro, many of whom were executed just a few months ago. He did not comment publicly after his arrest.
The accusations against him were accurate and serious, a French official later said, close to President Emanuel Macron. He also said that the state is willing to hold long-term talks to adjust the shareholders' pact to deal with the tension, but not now and for sure, until the current governance situation is clarified. Renault replaces Gon as Chief Executive on a temporary basis while waiting for more information.
Macron watched the spectacle of the Guo's arrest on Monday through the headlines, just like his finance minister and officials in charge of Renault's state stake, according to the two officials who know the issue. The French head of state had not warned that Ghosn, 64, had problems, although about 50,000 people in France are working in Renault.
Nissan may have been motivated to keep the French out of its cycle, remembering a strong power struggle in 2015 when Macron, as Minister of Economy, raised the government share in Renault without warning Ghosn or the Japanese. This allowed France to frustrate Nissan's efforts to increase its influence to the French automaker.
The conflict could not come at a more dangerous point. The deployment of electric vehicles and the switch to autonomous driving are long-term challenges and require huge investment, making the scale of production and research and development provided by the Alliance more important than ever. Separating joint production, modeling, sharing and buying parts could cause years of disarray.
Investors were blinded by Gon's arrest for alleged financial misconduct and were afraid of a devastating corporate battle sold to the shares of the two companies.
"All stakeholders need to be aware that the last thing Nissan and Renault need is a continuous management and culture that will eventually lead to a dysfunctional Alliance and a further decline in competitiveness," writes Andr Ellinghorst, an analyst in Evercore ISI. customers.