Nissan and Renault Alliance Under Severe Strain

Nissan and Renault’s clashes are getting serious after Chief Executive Hiroto Saikawa directly criticized their French alliance partner, Renault over a governance issue. The strain between two automakers has been exposed after the arrest of former Chairman of Nissan, Carlos Ghosn.

The Chief Executive Saikawa said that they have received a letter from Renault. In this letter, Renault has expressed that the alliance with Nissan will be ended unless they would have provided more rights under new governance reforms.

Nissan and Renault Fight Over Governance Issue

The French automaker said that they would not vote on governance measures in the Nissan shareholders meeting that will be held on 25th June. The story behind this resistance is that in their perspective Renault views do not adequately impact the decision. Therefore, they have decided not to comment on the matter.

In the meantime, Renault owns around 43% of Nissan Company but it is now trying to gain more part in this company. The French automaker is planning to strengthen its corporate governance by attaining more representatives in the committee.

Whereas, after this stance of Renault, Nissan company calls it the most regrettable as it is against their efforts of making the corporate governance strong.

According to the Renault proposal, at least one or two directors suggested by this French automaker should be a member of each of the three committees so that their rights in Nissan could be fully recognized.

Nissan further elaborated that the board comprises executives from Renault and Senard which have unanimously agreed upon the three committee systems. However, Nissan will keep supporting the change in the governance structure for the better tomorrow.

Besides this Renault, sources said that their under-representation concern has motivated the Senard also in a letter. The new Nissan three committee system has been questioned which was followed by the arrest of their former Chairman Ghosn. Ghosn is facing trials and he has denied the charges of financial misconduct against him.

According to Renault, this refusal to vote is not final and it can change its position in the future. And it depends upon the assurance from Nissan to provide this French automaker with appropriate representation as a major shareholder.

The conflict of interest between both parties is still there as a strain has already broken their alliance.

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