Friday, January 18, 2019

the real issues of the dangerous release of Carlos Ghosn


The French government has struggled to resolve it. Faced with a Japanese judicial procedure that exceeds it, the government has finally come to the evidence: "the impediment" of Carlos Ghosn will last. After the court of Tokyo rejected the bail application, the French government decided not to wait for the outcome of the appeal to officially decide that Carlos Ghosn, Renault's CEO, should be dismissed.

"I always said, recalling the presumption of innocence of Carlos Ghosn, that if Carlos Ghosn was to be permanently prevented, we will have to move on, to a new stage. We are there and we are now entering a new stage, "said Bruno Le Maire, Minister of Economy on LCI.

Carlos Ghosn will not get out of prison before, in the best of cases, on March 10, in the least bad case, not before his trial, and in the worst case scenario ... Before several years, if he were convicted by the court for the three examinations (aggravated breach of trust, concealment of income ...) for which he incurs up to 15 years in prison.

The "vacancy" has already gone on too long

For Renault, impossible to wait until then. Neither the operational and strategic imperatives, nor the markets that have already crossed Carlos Ghosn, will allow it. The "vacancy" of Renault's CEO headquarters has only lasted too long since Carlos Ghosn has been imprisoned since 19 November, almost two months away. The French state has continued to cling to the idea that it would end up out of prison, or that it was necessary to gain a little time in order to find a replacement.

In two months, the French state, the largest shareholder of Renault with 15% of the capital, failed to develop a plan B. According to our colleagues in FigaroJean-Dominique Senard, who is about to hand over the reins to Michelin, could become chairman of Renault's supervisory board, with Thierry Bolloré as executive and operational chairman. The board of the French automobile group is to meet this weekend to take this new organization chart. But this one will be especially temporary. The state wants a CEO capable of taking operational and above all strategic leadership to impose it also at the head of the Renault-Nissan-Mitsubishi Alliance.

This is where everything is played out ... It is not by chance that Martin Vial, head of the EPA (State Participation Agency) and Emmanuel Moulin, Bruno Le Maire's chief of staff, flew this week to Tokyo to gauge the acceptance criteria of a new governance by the Japanese camp.

Breaking trust?

The decision of the French state to "let go" Ghosn confirms the worst premonitory scenarios that the markets have not ceased to raise in recent years: that of a sustainable vacancy leader at Renault putting it in trouble with a Nissan anxious to rebalance the Alliance.

In addition, relations between the two parties have deteriorated significantly with the arrest of Carlos Ghosn. French side, it is considered that he was trapped by Nissan through a prosecution investigation. Nissan's reluctance to pass on to its ally, the case that allowed Japanese justice to stop Ghosn, did not temper the climate. Finally, Hiroto Saikawa's refusal to convene a general shareholders' meeting, which should allow Renault to regain a seat on Nissan's board of directors (left vacant, in fact, by the impediment of Carlos Ghosn) has accentuated the discomfort, to the point that some are worried about a point of no return on the trust between the two partners.

The Renault-Nissan-Mitsubishi Alliance saves € 5.5 billion in synergies each year through purchasing, platform sharing and R & D - a significant competitive advantage. But, if the disagreement continues, the Alliance could disintegrate even though Carlos Ghosn was working to deepen it further.

The history of the automotive industry no longer counts mergers missed for cultural considerations ... This is what Carlos Ghosn has always feared: more than ever, they threaten his work very seriously!





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