The arrest of Carlos Ghosn, the chairman of Nissan, has thrown a spotlight on the fate of the alliance between the three giant carmakers that he headed.
Ghosn was the architect of a link-up between Renault, Nissan and Mitsubishi – the world’s second largest car manufacturing group. Nissan and Mitsubishi have already announced their intention to remove him as chairman of their firms, while the French government has said he cannot remain chairman and chief executive of Renault.
The power plays among the alliance members have already begun, although it is unclear who precisely will be in control, given the unorthodox governance structure of an alliance previously held together by the force of Ghosn’s personality. Renault owns 43.4% of Nissan, while Nissan owns 15% of Renault and 34% of Mitsubishi.
Osamu Masuko, Mitsubishi’s chief executive, has already raised the prospect of a separate chair for the boards of each of the alliance members.
“I don’t think there is anyone else on earth like Ghosn who could run Renault, Nissan and Mitsubishi,” Masuko said on Tuesday.
Analysts expect a cross-border arm-wrestle for power if the trio no longer share a chair. Hiroto Saikawa, Nissan’s chief executive, has previously expressed his opposition to a full merger between his firm and Renault, and sought to distance himself from Ghosn’s reign after announcing his arrest on Monday.
However, Renault said on Tuesday that it remains “particularly focused on the consolidation of the Renault Nissan Mitsubishi alliance” in a statement.
The upheaval could be a chance to improve the governance structure at all three companies, said Alan Brett, head of governance ratings at MSCI, a financial data firm that had given Nissan its lowest possible rating because of weak management oversight. Nissan was previously implicated in a separate scandal in which it falsified emissions data. Saikawa said on Monday that “too much authority was given to one person in terms of governance”.
Operationally, at least, Ghosn’s absence will not be too damaging, according to analysts at Deutsche Bank. Ghosn had little day-to-day hands-on involvement at Nissan and Mitsubishi, while at Renault there are already “highly reputable managers who can run the company”.
In the meantime, Nissan’s workers in the UK also face uncertainty. Ghosn was personally involved in securing assurances from the government that its Sunderland plant would not be harmed by Brexit.
A new chair’s views may differ, said David Bailey, an automotive expert and professor of industry at Aston University. That will add to uncertainty for workers at the plant, which was chosen to host production of Nissan’s new Qashqai model, he said.
The alliance is still jostling with Volkswagen for the number one slot in the global car market, but the vultures are circling. Short sellers, who bet that certain share prices will fall, have focused heavily on the Japanese transport sector since Ghosn’s arrest. That pressure will build if Ghosn’s influence across the alliance is erased entirely.
