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Nissan's Ghosn crisis

France drops support for Ghosn to limit Renault damage

Government fears leadership vacuum ahead of China electric-car rollout

From left, French President Emmanuel Macron, Renault Chairman Carlos Ghosn and Economy Minister Bruno Le Maire visit the automaker's factory in Maubeuge, France, last year.   © Reuters

PARIS -- French automaker Renault has begun searching for new leadership following the government's call to replace Chairman and CEO Carlos Ghosn, whose detention in Japan drags on as he awaits trial.

"The governing bodies of Renault are actively working to find the best solution for the future governance of the group, with a view to preserving the company's interests and strengthening the Renault-Nissan alliance," the automaker said Thursday.

"The board of directors will take the required decisions on this matter as soon as the necessary elements are available," according to a statement attributed to Lead Independent Director Philippe Lagayette and Patrick Thomas, chair of the appointment and governance committee.

A board meeting to determine Renault's future leadership is expected to be held as soon as Sunday. Among the executives said to be considered as candidates to replace Ghosn is Jean-Dominique Senard, CEO of tiremaker Michelin.

After initial resistance to replacing Ghosn, the French government now appears intent on minimizing the leadership vacuum at Renault, which is being led on an interim basis by Deputy CEO Thierry Bollore.

Renault, a major French employer, must release a strategy for fiscal 2019 when it announces fiscal 2018 earnings in February. The company also is preparing to debut electric vehicles in China, its most important market.

New leadership at Renault would turn the focus toward who will lead the world's largest auto alliance, who will succeed Ghosn as head of Nissan Motor and whether to revamp Nissan's capital relationship with Renault -- a source of friction between France and the Japanese automaker.

The Renault statement came after Bruno Le Maire, the French economy and finance minister, on Wednesday called for Ghosn to be replaced on local television channel LCI.

"I have always said that if Carlos Ghosn were to be durably incapacitated, we'd have to move on to something else, and we're there now," Le Maire said.

The French government is Renault's largest shareholder, with a 15% stake. Renault holds 43.4% of Japanese partner Nissan, which owns 34% of Mitsubishi Motors.

Paris had opposed firing Ghosn following his November arrest in Japan, citing the presumption of innocence and saying it had not directly seen any evidence of the charges against him, which include understating his pay at Nissan.  Nissan and Mitsubishi Motors, by contrast, moved quickly to dismiss him as chairman.

The French government may have been waiting to see how the case would play out and expecting Ghosn to be granted bail soon --- a prospect ruled out by a Tokyo court on Thursday. 

Renault's management had taken a similar stance. Lawyers for the automaker received Nissan's internal report on Ghosn's alleged misconduct in December, but the French automaker's leadership has not seen it and has no evidence of wrongdoing, an executive at the company said.

But France now seems focused on minimizing the damage to Renault by requesting new governance, as public opinion turns against Ghosn following a string of new allegations.

The tides began to shift this month, when it was revealed that several Dutch companies had made shadowy payments to him. It also was discovered that Nissan funds were used to pay his membership fees for a yacht club.

Some in France had viewed Ghosn's arrest as a coup by Nissan, but in a sign of changing opinion toward the Brazilian-born French national, French newspaper Le Monde ran an editorial Monday calling for his removal.

President Emmanuel Macron's government also leans toward the conclusion that Ghosn can no longer remain at the head of Renault. With its approval rating down, the government seeks to avert any criticism that it is protecting a wealthy, well-connected corporate executive as the "yellow vest" protests to improve French living standards continue for a second month.

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