Nissan, Renault shelve plans for full merger
Renault and Nissan have shelved plans to push towards the full merger former leader Carlos Ghosn craved and will instead fix their troubled alliance to try to recover from the coronavirus pandemic, five senior sources told Reuters.
Nissan has long resisted Renault’s proposals for a full- blown merger as executives felt the French carmaker was not paying its fair share for the engineering work it did in Japan, sowing discord that some feared could wreck the partnership.
Now, with carmakers around the world reeling from the pandemic, the partners are planning to overhaul an alliance that largely failed to convert its global scale into a competitive advantage beyond the joint procurement of parts.
Both carmakers are set to announce mid-term restructuring plans this week that will serve as a peace treaty designed to resolve the long- standing tensions, the five people familiar with the overhaul told Reuters.
“After the rain, the earth hardens,” said one senior Nissan source, citing a Japanese proverb that means relationships become stronger after strife.
All five sources within the alliance, which also includes Mitsubishi Motors Corp., declined to be named because they are not authorized to speak with media.
Nissan and Renault are each planning substantial restructuring and cost cuts that could affect tens of thousands of jobs, with the Japanese firm to announce its measures on Thursday and its French partner likely to follow the next day.
Before that, Mitsubishi, Nissan and Renault are holding a joint news conference on Wednesday during which they are expected to outline the philosophy behind their new “leader- follower” approach to the alliance.
The sources said the companies were unlikely to disclose many details at the events this week of how the new approach will be used to share costs as the companies were still working on specific projects. However, the crisis at both carmakers has accelerated efforts to resolve the disagreements that have stymied collaboration and cost- sharing in technology and product development for five years, the sources said.
Mitsubishi, Nissan and Renault all declined to comment about alliance plans.
The alliance has steadily ramped up output over the years, delivering over 10 million vehicles for the first time in 2017, the first full year after Mitsubishi joined the partnership.
But persistent quibbles over sharing the costs of innovation and new vehicle development soured relations and stalled plans to forge an even tighter alliance.
Nissan executives believe their engineers are substantially more productive than their Renault colleagues and the way the French carmaker proposed to combine technology and product development did not properly account for Nissan’s intellectual property, three of the sources said. “Nissan engineers on average produced 40 per cent more than their Renault counterparts in a given amount of time spent on a job,” one insider told Reuters in January.
After his arrest in 2018 in Tokyo on charges of financial misconduct, former alliance head Ghosn said his detention was part of a plot by Nissan executives to bring him down and block any merger.
Earlier this year, relations looked strained to a point where the 21- year alliance was at risk of collapse. However, the turnaround plans due are now likely to be combined to forge what the sources described as a more equitable way of sharing technology and resources.