Renault-Nissan-Mitsubishi Alliance Chairman Carlos Ghosn is busy trying to convince shareholders of Nissan and Mitsubishi stock that Renault isn’t aiming to take over its Japanese partners. It’s proving to be no easy task.
While Ghosn has been clear of late that a merger isn’t in the works, he’s simultaneously adamant that the relationship between the companies must become “irreversible” before he retires from the industry in 2022.
Last month, Nissan CEO Hiroto Saikawa said he would prefer the two companies remain independent after Ghosn said there was no chance Renault would acquire Nissan and Mitsubishi outright. The Japanese want to maintain their independence, but there’s also a sense that executives are trying to tone down the merger rhetoric while deals are made behind closed doors. This hasn’t been confirmed, though speculation remains rampant and Ghosn has had to continue to deny the possibility of a buyout.
Addressing a crowd at the annual shareholders’ meetings for both Nissan and Mitsubishi, he stressed the importance of the alliance while simultaneously trying to disavow media reports that Renault is trying to come up with a purchasing deal. “Anybody who will ask Nissan and Mitsubishi to become wholly owned subsidiaries of Renault has zero chance of getting a result,” Ghosn told Japanese shareholders. “We have not done it for the last 19 years. We’re not going to change today.”
Renault holds a 43.4-percent stake in Nissan, despite the Japanese automaker being the larger company. After a kerfuffle with the French government (which has a 15-percent stake in Renault), the automaker agreed to give Nissan more autonomy.
Nissan, which owns 34 percent of Mitsubishi and 15 percent of Renault, has been pushing for voting rights. Due to the share breakdown in the Alliance, the company effectively has no voice when it comes time to cast its ballot. Naturally, it made a fuss over the issue.
During all of this, reports emerged that the French automaker is pursuing a merger on the sly. While Ghosn continues to squash those claims, he has repeatedly expressed the importance of a grand convergence — something that has yet to be clearly outlined.
“The last thing we want to do is by converging the three companies, do something where some people are demotivated, because they have the impression that they will be working for somebody else,” Ghosn said last last month. “This is a fundamental issue.”
Efforts to smooth things over with investors yielded mixed results. Media outlets continue you speculate on a looming buyout while some shareholders and Japanese employees remain unconvinced. There is also tension within Mitsubishi since Nissan took a controlling share in 2016. According to Automotive News, one pro-Mitsubishi investor accused Nissan of taking advantage of the automaker in a weak moment.
“Nissan is taking over Mitsubishi Motors,” the investor said. “I’m frustrated … What’s the benefit of being under the umbrella of Nissan?”
Ghosn said that combining sales puts the Alliance on par with the likes of Volkswagen and Toyota, noting that all companies benefit from shared innovation and cooperative production. He also referenced the DaimlerChrysler-Mitsubishi alliance as an example of what not to do.
“We do not believe that companies where you have one company dominating the others is sustainable. In our industry, it doesn’t work,” Ghosn said. “In the cemetery of carmakers, you have plenty of companies which collapsed because they forgot this very simple fact.”
Ghosn seems to genuinely believe that the continued success of all three companies hinges on cooperation. While that sounds like thinly veiled merger talk, it might not be. Ghosn’s vision may include a future where the brands are dependent upon one another without necessitating a buyout. Just how he intends to accomplish that irreversible partnership without one is unclear.