Ghosn pledges to cement 3-way ties

Renault SA’s Carlos Ghosn pledged to cement the French automaker’s partnership with Nissan Motor Co and Mitsubishi Motors Corp after agreeing to stay on as chairman and chief executive officer for the next four years.

“By June, the companies will have a plan make the alliance irreversible,” Ghosn said yesterday after Renault reported record annual revenue and profit.

“A new plan to boost efficiency at the partnership will be unveiled in the coming weeks,’’ he told analysts at the company’s headquarters near Paris.

Ghosn’s reappointment, announced late Thursday, put to rest weeks of speculation about Renault’s leadership and ensures the longtime CEO will continue to steer the company through a potentially jarring technology transition.

France, a top shareholder, had demanded a pay cut, succession planning and deeper ties with Nissan that can outlast Ghosn’s tenure.

Renault also named a second-in-command to Ghosn, who will free the busy executive to focus on strengthening the alliance. Thierry Bollore, the company’s chief competitive officer, was named chief operating officer, putting him in line to succeed his 63-year-old boss.

Renault said operating profit rose 16% last year to €3.8 billion ($4.8 billion), beating the €3.6 billion average of analysts’ estimates compiled by Bloomberg.

Revenue jumped 15% to €58.8 billion as demand for cars continue to expand in Europe, the company said in a statement. Renault’s AvtoVAZ, which sells Lada cars, is also benefiting from an improvement in Russia.

France’s backing for Ghosn is a turnabout from three years ago, when the two were at loggerheads over the state’s level of involvement in the company.

Ghosn lost a clash with then-economy minister Emmanuel Macron over whether France and other long-term shareholders should have double voting rights. Ghosn argued in favour of one share, one vote, while Macron said the state deserved a greater say.

His new mandate reflects the priorities of France, which owns a 15% stake.

Ghosn will continue to focus on the carmaker’s strategic plan, called “Drive the Future’’, aimed at guiding the carmaker through industry shifts as more stringent pollution standards, electric vehicles and self-driving technology take hold.

Government officials also demanded Ghosn take a 30% pay cut.

“We want to build new era of relations between Renault and state,” French Finance Minister Bruno Le Maire said on C-news TV.

France supported a renewed mandate for Ghosn, while backing the nomination of Bollore, 54, a French citizen who started his career with the tyremaker Michelin.

French officials’ goal of installing a second-in-command at Renault with the managerial and international clout to succeed Ghosn “has been achieved with the appointment of Thierry Bollore,” analysts at Bryan Garnier said in a research note.

The new structure could give the French government political cover to reduce its stake, ultimately making a full merger of Renault and Nissan “a very real possibility,” Evercore ISI analyst Arndt Ellinghorst said in a note this week.

Still, Ghosn cautioned yesterday that any change in the financial structure of the alliance would have to be approved by both the French and Japanese governments.

He added that Japan would not agree to a tighter structure if France remains a shareholder, underscoring comments he’s made previously.

“For the moment, I don’t see how the Japanese side is going to accept further steps,” Ghosn said. “I don’t see it.”

France raised its stake in 2015 while Macron, who is now president, was economy minister. The state currently has no plan to sell Renault shares, a government official said this week.