(Reuters) - The Franco-Japanese automaking alliance of Renault SA (RENA.PA), Nissan Motor Co (7201.T) and Mitsubishi Motors is banking on a new recovery plan, set to be announced later on Wednesday, to salvage profitability.
Since its founding in 1999, the partnership between Renault and Nissan was dominated by its leader, Carlos Ghosn. His arrest on financial misconduct charges in late 2018 and his subsequent ouster as alliance chairman plunged the automakers into turmoil.
As Renault, Nissan and junior partner Mitsubishi repair their alliance, they are under pressure to recover from two years of falling vehicle sales, a problem exacerbated by the coronavirus pandemic.
The following is a timeline of key events in the alliance’s history.
Ghosn joins Renault as executive vice president as the firm struggles with falling profitability. The following year, he unveils his “20 billion franc cost reduction plan”, reviving his reputation as “Le cost killer”, earned during his prior job at tyre maker Michelin.
Renault’s profitability jumps three-fold by the end of 1998.
In March, Renault comes to the rescue of debt-laden Nissan which had seen three straight years of losses.
Later, Ghosn reveals his “Nissan Revival Plan”, targeting a return to profitability in the 2000 financial year.
Ghosn and his executive committee promise to resign if the targets are not met.
After cutting 21,000 jobs, or 14 percent of the workforce, shutting some local plants and dismantling Nissan’s “keiretsu” group companies, Nissan meets its goals a year ahead of schedule.
Ghosn is feted as a business celebrity in Japan, inspiring a manga comic based on his life.
Ghosn becomes CEO of Nissan. By the end of 2000, Nissan is contributing roughly half of Renault’s annual net profit, a situation that largely continues to this day.
Nissan announces its “Nissan 180” three-year growth plan, targeting an increase of 1 million units in global sales by September 2005.
Nissan misses its global sales growth target.
It announces a three-year “Value Up” plan to maintain a top-level operating margin in the industry, achieve global sales of 4.2 million units by March 2009 and a 20 percent return on capital on investments.
Ghosn becomes president and CEO of Renault.
Ghosn announces “Renault Commitment 2009” to position the automaker as Europe’s most profitable by volume.
Nissan fails to meet its main “Value Up” targets.
The automaker announces its five-year “GT 2012” plan to focus on investment but scraps it due to the financial crisis.
Nissan announces its “Power 88” mid-term plan, which includes targets to achieve an 8 percent global operating profit margin and an 8 percent global market share by 2017.
Nissan focuses on growing its U.S. market share to 10 percent. Renault’s operating profit falls for the second straight year due to slowing sales in Europe.
Renault and Nissan announce their “Common Module Family” plan for low-cost development and manufacturing of vehicles.
The new system is aimed at reducing component costs by 20-30 percent across the alliance. The next year they converge more functions, targeting 10 billion euros ($11 billion) in annual savings by around 2022.
Nissan announces it will take a controlling stake in Mitsubishi Motors, which is struggling with a mileage-cheating scandal. Ghosn becomes chairman of the automaker, making him chairman of all three partners.
Ghosn says he will step down as CEO of Nissan in April to focus on improving profitability at Renault and ensuring the alliance is “irreversible” after he retires.
Nissan posts a record operating profit of 742.2 billion yen ($6.90 billion), but falls short of “Power 88” targets. U.S. profit margins tumble as heavy discounting to boost sales leads to a fall in North American profit.
Later, Ghosn announces the “Alliance M.O.V.E. 2022”, setting combined targets for Renault, Nissan and Mitsubishi to achieve the ongoing target of annual synergies of 10 billion euros.
Renault posts record operating profit and global sales of 3.76 million units.
The alliance together sells more than 10 million vehicles globally, making it one of the world’s biggest automakers.
Ghosn is arrested in Japan on charges of underreporting his salary for more than a decade. He is accused of other crimes including using Nissan funds for his own purposes. He is fired as chairman of the alliance.
Nissan and Renault reel from the aftermath of Ghosn’s arrest. Both automakers overhaul their corporate governance system and appoint new boards, as profits continue to sink.
The alliance appoints a new chairman, Michelin veteran Jean-Dominique Senard. Tensions escalate between the automakers after Renault attempts to tighten capital ties with Nissan, a move which is rebuked by the Japanese automaker.
On Dec. 29, Ghosn escapes from Japan onboard a chartered flight. He eventually arrives in Lebanon, his childhood home.
Makoto Uchida, Nissan’s new chief executive, says in February he would accept being fired if he fails to turn the carmaker around.
Renault sys in April that it is in talks with the French government to secure a state-backed loan worth several billion euros by mid-May to shore up its liquidity.
($1 = 107.5500 yen)
Reporting by Naomi Tajitsu. Editing by Carmel Crimmins