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Nissan's Ghosn crisis

Renault leaders offer olive branch to Nissan under merger shadow

French side names Michelin CEO Senard sole representative in talks with Japanese side

PARIS/TOKYO -- With its appointment Thursday of a new chairman and CEO, Renault closed the book on the Carlos Ghosn era and reopened the door to talks with Nissan Motor as the two automakers struggle to work out the future shape of their alliance.

Jean-Dominique Senard, chief executive of tiremaker Michelin, was chosen to replace the resigning Ghosn as chairman. Senard will represent Renault in all negotiations with Nissan as their relationship has deteriorated following the November arrest of Ghosn, formerly the linchpin of the alliance.

"I want our relations to be as happy as possible" with Nissan and fellow alliance member Mitsubishi Motors, the new chairman said.

Senard will report to the board of directors, while new CEO Thierry Bollore handles the operational side of the business. The next leader of the Dutch joint venture that manages the alliance -- a post previously held by Ghosn as Renault chief -- has yet to be determined, according to the French company.

The appointment already appears to have produced a more positive tone, as Nissan announced on Thursday plans for an extraordinary shareholders meeting in mid-April, after twice rebuffing calls from Renault to do so. The Japanese automaker will remove Ghosn and former Executive Director Greg Kelly, who was arrested alongside Ghosn, from its board and appoint a replacement to be named by Renault.

"We'd like to have [Senard] join our board and discuss governance improvements together," Nissan CEO Hiroto Saikawa told reporters Thursday evening.

The Nissan CEO revealed Friday morning that he had spoken to Senard on the phone. While declining to comment on details, Saikawa told reporters, "It's a new start. I would like to have sufficient communication" with the new Renault management.

Japan's Chief Cabinet Secretary Yoshihide Suga told reporters later the same day, "We hope that dialogue between Renault's new management and the management of Nissan continues to progress, and that the Nissan-Renault alliance will be maintained and strengthened."

Ghosn had led all three alliance members as chairman until November, when Nissan and Mitsubishi removed him after his arrest in Japan on allegations of financial misconduct. Renault had kept him on despite his absence, raising concerns at Nissan that management of the alliance could get bogged down.

Senard's appointment gives Nissan an official dialogue partner to work with, a development welcomed by Saikawa.

"It had been difficult for the boards to communicate with each other since the affair in November," he said on Thursday. "This is a major milestone for the alliance."

Senard joined Michelin in 2005. In 2012, he became the first person from outside the founding family to lead the company. He is known for a dialogue-oriented management style, in contrast with Ghosn's top-down leadership.

But Senard is expected to follow the wishes of the French government, Renault's largest shareholder, in talks with Nissan on the contentious issue of the partners' capital relationship.

Paris sent a delegation to Japan last week to inform government officials of its intention to integrate the two automakers. The delegation also met with Saikawa, though the Nissan chief said integration was not discussed.

French Economy Minister Bruno Le Maire later asserted that renegotiating the alliance's capital ties is "not on the table." But France has long sought to make the partnership "irreversible," given Renault's reliance on its larger Japanese partner for profits as well as research and development. Ghosn reportedly was considering a merger before his arrest.

Deciding when and how to broach the topic with Nissan will be a tricky task for Senard. As it has in the past, the Japanese automaker is sure to object to any plan that involves strengthening Renault's influence.

"Having a new, solid management team is the first step for discussions between Renault and Nissan," said Takaki Nakanishi, president of the Nakanishi Research Institute. "Senard is expected to act as the coordinator between Renault, Nissan and the French government, as the government has been intervening significantly in discussions about the alliance. It views this as national policy."

The turbulence at Renault and Nissan comes amid great upheaval in the global auto industry. This month alone, Ford Motor and Volkswagen launched a comprehensive partnership, while Toyota Motor and Panasonic announced plans to build electric-car batteries together. Lengthy and difficult negotiations could damage the Renault-Nissan alliance's long-term strategy.

Seiji Sugiura, senior analyst at the Tokai Tokyo Research Institute, warned that any battle over leadership of the alliance risked distracting the companies at a critical time, as the auto industry faces a global slowdown. China's new-car sales declined in 2018 for the first time in 28 years, while the industry also faced the emergence of disruptive players such as Google.

"Nissan and Renault are already behind in the global market," Sugiura added. "Nissan has been unable to release a new model every year recently. The company is now paying the price for the inappropriate governance for the past years."

Nikkei staff writer Eri Sugiura in Tokyo contributed to this report.

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