Renault vote puts ball in Ghosn's court, exposing rival visions

Thu Apr 30, 2015 2:18pm EDT
 
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By Laurence Frost

PARIS (Reuters) - The French government's move to tighten its hold on Renault (RENA.PA: Quote), crowned by a rare public defeat for CEO Carlos Ghosn on Thursday, has exposed competing visions for the carmaker and its alliance with Nissan (7201.T: Quote).

Ghosn must now decide whether to fight or negotiate for closer Renault-Nissan integration, those close to him say, in the face of French determination to keep Renault in control of the alliance - and its own hand on the wheel.

"I don't think he's going down without throwing a punch," one alliance executive who knows the CEO well said.

Ghosn has long favored giving Nissan more clout to match its superior sales and profit, according to Renault-Nissan veterans who say he has tried before and may do so again.

Seeking to increase its influence at Renault and other French companies in which it holds stakes, Socialist President Francois Hollande's government has introduced a law that doubles the voting rights on shares held for more than two years.

Companies can opt out of the rule, but a resolution to this effect proposed by Ghosn failed at a shareholders' meeting on Thursday, falling short of the required two-thirds majority with 60.5 percent support.

The result was no surprise. Economy Minister Emmanuel Macron announced three weeks ago a 1.2 billion euro ($1.34 billion) share purchase to raise France's Renault stake to 19.7 percent from 15 percent, in order to block the opt-out.

While the government has promised to pare the stake back to 15 percent, the "Florange law" still raises its voting weight to 28 percent, all but guaranteeing a veto on strategic decisions.   Continued...

 
A labour council representative holds a facsimile 500 euros note with the portrait of Carlos Ghosn, Chairman and CEO of the Renault-Nissan Alliance, before the French carmaker Renault's shareholders general meeting in Paris, France, April 30, 2015. REUTERS/Benoit Tessier