REUTERS
Worried by France's grab for more influence over Renault and unable to make its concerns heard in Paris, Nissan Motor is taking matters into its own hands, according to Nikkei Asian Review.
The Japanese automaker is looking to raise its stake in its French partner. This follows six months of discussions with the French government in which Nissan argued for preserving the alliance's managerial independence, the report says.
Renault shareholders voted in April not to block the so-called Florange law, which lets long-term shareholders in French companies double their voting rights. Nissan fears that this will not only give Elysee Palace a greater say in Renault's management but also leave itself open to government interference.
One option for blocking such encroachment is increasing Nissan's ownership of Renault from 15% to at least 25%. Under a provision of Japan's corporations law pertaining to cross-shareholding relationships, Renault would lose its 43.4% share of voting rights in Nissan if the latter's stake went up to a quarter.
This legal tit for tat would stop France from making its presence felt through Renault. But Nissan would lose the stability of having a dependable partner as a major vote-wielding shareholder.
Nissan is weighing a second option: issuing new stock to dilute Renault's rights. Under French law, if this share fell below 40%, Nissan would gain voting rights on its 15% stake in Renault, giving it a voice to raise against the French government's. All other existing Nissan shareholders would also see the value of their stakes watered down, however.
Automaking alliances often fail — witness Suzuki Motor's falling out with Volkswagen. The Nissan-Renault partnership stands as rare success story. The two companies operate essentially as one in personnel management, R&D, logistics, procurement and other business matters. They reaped a record EUR 3.8 billion ($4 billion) in synergies from their alliance in fiscal 2014.
The French government, seeking to maintain domestic jobs, once stepped in when Renault tried to shift passenger car production to Turkey. In risking an open spat with Paris, Nissan seems to fear that this interventionist past will repeat itself.