It’s no secret that the entente between Nissan – rescued from near bankruptcy 16 years ago by Renault, headed by all-round car superguy Carlos Ghosn – and the French government has not been very cordiale of late. Under socialist president Francois Hollande the level of state intervention in Renault (and thus by default Nissan) has been rising – most notably in the form of a controversial double voting rule pushed through last summer. The government is after all Renault’s largest shareholder with a 19.7% stake.
Bosses at the Japanese manufacturer (which ironically is now putting in a substantially better commercial performance than its erstwhile rescuer) are unsurprisingly not over the moon at the prospect of having their hands forced by a foreign government 5,000 miles away. So last week’s news of a deal that caps government voting and codifies the principle of non-interference in the appointment of directors at Nissan apparently marks a welcome conclusion to the whole unhappy saga.
In reality it’s more a truce than a full on peace treaty, but anyway it matters less than it seems - the story is not really about official meddling but about what will happen if, when, the legendary architect and CEO of the alliance, 61 yr old Carlos Ghosn, calls it a day.
Given that there is no even semi-official suggestion that Ghosn (probably the most highly-regarded auto exec in the world) is going anywhere as yet you might wonder what all the fuss is about. But it’s a fascinating study of how a superstar boss can, over the course of time, morph from being a killer asset to an increasingly dangerous liability, and all without ever becoming any less competent or impressive a leader than they were to start with.
To understand why it’s necessary to go back to the 90s and the bold actions of Renault in saving Nissan’s bacon, sinking $5bn into a one-third stake in the battered carmaker. The terms of the deal were (and remain) firmly one-way traffic - Renault has voting rights over Nissan, Nissan has no voting rights over Renault.
Ghosn – then-president Louis Schweizer’s right hand man – was sent to Japan to take charge of the patient, a task widely regarded as career suicide. Surely the proud Japanese execs at Nissan would rather commit Hara-Kiri than work for a foreign boss from a firm that had until recently been a deadly rival?
Well, no. Action man Ghosn rapidly became a national figure, almost revered by the Japanese who worked for him. He even has his own manga comic strip. Nissan’s fortunes soared, whilst those of its parent have gone in the opposite direction.
So Nissan bosses chafe at the fact that despite doing better than Renault, they remain very clearly the junior partner in the alliance. But they trust Ghosn implicitly to do what is right for them, so as long as he is at the wheel they are prepared to put up with the situation.
Their existential fear is not who votes where, but rather what will happen when Ghosn is no longer in charge. Who will take over, and what will that mean for Nissan? And who can blame them for worrying - the prospect of a new CEO effectively voted in by the French cabinet would be enough to make anyone choke on their green tea.
And of course they know that Ghosn must go sooner or later whatever he says, so those fears translate into efforts to get out from under the Renault yoke, which puts more strain on the alliance and – the ultimate irony – probably brings the date of Ghosn’s eventual departure closer than it would otherwise be.
Meanwhile the French government have their own fears, to whit that Nissan could, if pushed far enough, launch their own pre-emptive bid for Renault and turn the tables that way. It has the cash. You don’t have to be a genius to know what that would mean for les jobs.
Just to add more grist to the mill, Ghosn is also being touted by some industry watchers as a potential CEO-in-waiting for emissions-strangled German giant VW. Phew.
So despite all the stories to the contrary, Nissan-Renault is really all about succession – and like most succession issues, it will run further and faster than a plug-in hybrid on a full charge.