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Q&A with Ghosn: Renault-Nissan ties must be acceptable to all

Under French pressure, search is on for a more formal alliance between the automakers

Carlos Ghosn says any reworking of the capital ties between Renault and Nissan must take into account the needs of all shareholders. (Photo by Manami Yamada)

TOKYO -- Questions about the future relationship between alliance partners Nissan Motor and Renault are coming to the fore as the French government, a major Renault shareholder, pushes for a stronger bond between the two. Renault CEO Carlos Ghosn told Nikkei in an interview Monday that he wants to prepare the alliance for the future, but any changes would require buy-ins from all stakeholders, including the Japanese and French governments.

Edited excerpts from the interview follow:

Q: What are the strengths of the Renault-Nissan alliance? 

A: I think scale. Because of the multiplicity of the investments that need to be made, it is easier for larger companies to be able to be present in all fields. The scale of the alliance today is certainly one of the top three by whatever indicator you use.

Second, we have an advantage in the multiplicity of the actors inside the alliance. We are still three companies: Nissan is an autonomous company; Renault is an autonomous company; Mitsubishi Motors is an autonomous company. Each one works on its own field of strength at the same time --  which in my opinion on what is coming would be a strength because you have autonomous companies going in different directions, addressing different issues while sharing. This is becoming more of an advantage.

Third, the alliance has shown that it was able to start before others on some of these plans. The electric car has been a great demonstration of how the alliance stepped in and said that they will develop an electric car at the moment when no one in the world believed in the future of the electric car, and now nobody thinks there is a future for the industry without electric cars. We are doing the same thing with autonomous driving; we are doing the same thing with connectivity.

Q: The French government is demanding that the alliance be "irreversible."

A: I consider that the alliance is irreversible, because the alliance is delivering synergies to Nissan, it is delivering synergies to Renault, and delivering synergies to Mitsubishi.

The French government and the financial community are skeptical about its irreversibility. The financial community is saying that they want to make sure that this [alliance] that has been working in the interest of Nissan, Renault, and Mitsubishi will continue to work [after I am gone]. 

As to the process by which the next head of the alliance will be designated, we don't have a clear answer. We will need to come up with a solution.

Q: When will you come up with the new structure?

A: Within the next mandate [as CEO of Renault] -- 2018-2022 -- we need to find a solution. We need a solution in which nobody is preoccupied about the future of the alliance. That is the time frame I am giving myself because if I am not able to bring a solution, I should go.

Q: What is the best solution for the capital structure of the alliance?

A: We have been brainstorming since 1999 and never stopped, and we made many changes -- mostly operational. We started with the companies totally separate, we then put purchasing together and then we brought manufacturing together. Now we are bringing engineering together.

These were operational [steps], but we never really touched the governance of the alliance because we didn't feel that there was a need to touch it. Now, the new need is coming, due to the fact that a lot of the actors who are here today will leave at a certain point --  [making necessary] a process and an organization that would ensure that [the alliance] will continue. I need to make sure that everybody is feeling comfortable that this alliance will continue to perform well on the day I'm not here. 

Q: Is a merger one of the options that you are discussing at this point?

A: All options are open. I would not discard any option today, but I would not privilege any. I don't think we are fixed on one solution. Obviously, some of them are more probable than others because of the sensitivities that they can create.

All we can do is find a solution that is acceptable to all parties. All parties are interested in the long term for the alliance. Not only Renault-Nissan-Mitsubishi, but also governments have said that they like what the alliance has done for their countries. Everybody has an interest in this. We just need to find the solution that is acceptable to all.

Q: What is the French government demanding?

A: The French government, as a main shareholder of Renault, can voice its opinion like any major shareholder. I have big funds that are shareholders of Renault, I have big funds that are shareholders of Nissan, and often they come to me and they express their opinion, which is normal. But what is important is to make sure [to understand] why some shareholders are worried. You need to go beyond the people's positions and ask them to give the reasons why they are worried. This is where we need to be very constructive, very open, not to ignore peoples' fears, anxieties and questions. 

Q: Various press reports are making the impression that the French government is telling you what to do, and then it sounds like you are reacting.

A: I am not going to do something against my convictions, not at 64 years old and toward the end of my career. Everybody understands that because I know the mechanism that makes the alliance work, I am not going to be directly or indirectly promoting any solution that I know could jeopardize the solidity of the alliance. The board can find somebody else who can do that, but not me. I'm not going to put in place an option that I don't consider as good. Nobody can force me to do that.

Q: What would you do if the interests of the French government and the interests of Nissan and Renault collided? How would you find a solution?

A:  I think if they collide, then we're back at the status quo. Because you cannot move anything without all of the parties agreeing. Collision means status quo. The status quo is very comfortable for many people acting today, but it is going to be very uncomfortable for the people who are going to be in charge tomorrow because there are many unanswered questions. If you need to prepare for the future, you need to start as soon as possible to prepare for solutions that could be acceptable for the future.

Interviewed by Nikkei staff writer Akito Tanaka

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