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Nissan's Ghosn crisis

Nissan, Renault, Mitsubishi launch post-Ghosn era with new board

New alliance structure may still leave scope for power struggle

From left, Renault Chairman Jean-Dominique Senard, Nissan CEO Hiroto Saikawa and Mitsubishi Motors Chairman and CEO Osamu Masuko attend a news conference in Yokohama, Japan on March 12. (Photo by Yuki Nakao)

TOKYO -- Nissan Motor, Renault and Mitsubishi Motors on Tuesday sought to end months of turmoil over the future of their automotive alliance with the creation of a new decision-making board to replace the structure that left ousted chairman Carlos Ghosn holding virtually unchecked power.

The new alliance management was hailed by the three companies as a "new start" for their partnership. Unveiled at Nissan headquarters in Yokohama after the Japanese company's board meeting, the companies said the new board "will be the sole body overseeing the operations and governance in the Alliance among Renault, Nissan and Mitsubishi."

The new structure aims to share more evenly the benefits of collaboration between the three, and especially between Renault and Nissan. The Japanese carmaker has argued that the alliance has for some time been managed for the benefit of Renault, such as producing cars for the U.S. market at a struggling Renault plant in South Korea.

"I feel very positive about this consensus-based system which is much more efficient and well-balanced," Renault chairman Jean-Dominique Senard said. Nissan's CEO Hiroto Saikawa added that this board "reflects a truly equal partnership." 

However the new structure will not affect the alliance agreement struck in 2015 or the cross-shareholding structure in which Renault holds 43.4% of Nissan but has limited voting rights. Nissan owns 15% of Renault, with no voting rights, and 34 % of Mitsubishi.

Senard will be chairman of the new board, while the decision-making committee will include Saikawa, the French carmaker's CEO Thierry Bollore, and Mitsubishi Motors chairman and CEO Osamu Masuko.

The new entity marks a clear break with the past, when Ghosn chaired all three carmakers and was head of the previous alliance board, which discussed their collaborative strategy. Those positions allowed the former chairman to drive decisions through quickly. In contrast to the Ghosn era, the style of the new board will be consensus-based.

Former Nissan Motor Chairman Carlos Ghosn leaves his lawyer Junichiro Hironaka's office in Tokyo on March 12. (Photo by Toshiki Sasazu)

It also signals the partners' determination to start afresh after the alliance joint ventures, Renault-Nissan BV and Nissan-Mitsubishi BV in Amsterdam, came under scrutiny in the investigation into misuse of company funds during Ghosn's tenure. These corporate entities are accused of being used for Ghosn's personal benefit. Ghosn, who spent three months in a Tokyo jail as the prosecutors investigated those and other allegations, strongly denies all charges of wrongdoing.

The two sides have agreed under a memorandum of understanding attached to the announcement that the chairman of Renault will be a "natural candidate for the position of Vice Chairman and a Representative Director of Nissan." However, the question of who will replace Nissan's chairman has been left open.

Senard insisted that he did not intend to replace Ghosn as chairman of the Japanese automaker. "I am not seeking to be the chairman of Nissan," he said. Saikawa said Senard had reassured him that he would not "demand to be the chairman, for he is already the chairman of Renault. He has expressed his respect for Nissan's new governance structure." 

In choosing the new chairman, Nissan plans to take into account the recommendations made by a special committee which was established last year by the automaker to look at governance reforms. The committee is expected to submit proposals by the end of March.

The new board will meet monthly in Paris or Tokyo. It will preside over specific projects to drive new ways of creating value for the three auto companies.

Analysts said the move to create a new forum for the partnership was sensible but it might not resolve all the tensions that have beset the relationship between Renault and Nissan since Ghosn's arrest in November.

"Nissan and Renault intend to set at least a framework for dialogue, because they have had difficulty over the past few months," said one car industry analyst who preferred to remain anonymous. However, Renault's insistence that the cross-shareholding structure would not change was an early signal of potential tension. "Nissan seeks to use this body as an entry for revision of such unequal deals, while Renault wants to keep the profit-making Japanese carmaker under its control," the analyst added.

Soon after Ghosn was ousted from Nissan's board as chairman, Renault sought to name his successor but Nissan objected.

Ghosn has claimed that his arrest is the result of a "plot and treason" by Nissan executives to avert his plans for a merger or closer unification of the two companies.

Meanwhile Ghosn, released on bail last Wednesday, was refused permission by a Tokyo court to attend the Nissan board meeting. He is still a director of the company. He had sought to obtain a permission from the Tokyo District Court to attend the meeting on Tuesday to "fulfill his responsibility as a director," according to his lawyer.

"Mr. Ghosn is disappointed that the Court denied his request," said a spokesperson for Ghosn in a statement released on Tuesday. "It is unfortunate that the meritless and unsubstantiated accusations against him have blocked his ideas and perspective from being deployed in service of the company he served for the past twenty years," he added.

According to Ghosn's defense lawyer, the Brazilian-born tycoon told lawyers on Tuesday that he was "worried of Nissan," because it will need "a strong leadership to support [its management]." Ghosn did not watch the press conference which was broadcast online, the lawyer added.

Nikkei staff writer Jada Nagumo contributed to this article.

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