Ghosn’s arrest casts doubt on future of Renault-Nissan alliance

Carlos Ghosn was arrested in Japan Monday for allegedly abusing company funds and misreporting his income. (AP)
Updated 20 November 2018
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Ghosn’s arrest casts doubt on future of Renault-Nissan alliance

  • Carlos Ghosn been ‘the glue that holds Renault and Nissan together,’ Bernstein analyst Max Warburton wrote in a note to investors
  • With Ghosn out at Nissan and probably Renault as well, the companies are unlikely to get any closer

DETROIT: For years, France’s Renault and Japan’s Nissan struggled to make money in the global auto business.
Then came Carlos Ghosn, a Renault executive who helped to orchestrate an unprecedented transcontinental alliance, combining parts of both companies to share engineering and technology costs.
Now Ghosn’s arrest in Japan for alleged financial improprieties at Nissan could put the nearly 20-year-old alliance in jeopardy.
Ghosn, 64, born in Brazil, schooled in France and of Lebanese heritage, is set to be ousted later this week from his spot as Nissan chairman. He also could also lose his roles as CEO and chairman of Renault, threatening the alliance formed in 1999 that’s now selling more than 10 million automobiles a year.
He’s been “the glue that holds Renault and Nissan together,” Bernstein analyst Max Warburton wrote in a note to investors. “It is hard not to conclude that there may be a gulf opening up between Renault and Nissan.”
Nissan has said it will dismiss the Ghosn after he was arrested in Japan Monday for allegedly abusing company funds and misreporting his income. That opens up a leadership void at the entire alliance, for which Ghosn officially still serves as CEO and chairman.
Ghosn added Mitsubishi to the alliance two years ago after the tiny automaker was caught in a gas-mileage cheating scandal. He had even floated the idea of a full merger between the three companies.
“Today’s events throw any prospect of that up in the air,” Michael Hewson, chief market analyst at CMC Markets in London, wrote in a note to investors.
Nissan CEO Hiroto Saikawa has publicly resisted the idea of an outright merger. So, with Ghosn out at Nissan and probably Renault as well, the companies are unlikely to get any closer.
The companies now share technology, and they save money by jointly purchasing components.
While there could be some scrutiny of the relationships between the companies, they’re so intertwined now that cutting them apart would be difficult, said Kelley Blue Book analyst Michelle Krebs. “I would not predict its demise,” Krebs said of the alliance.
She said she sees further consolidation in an industry that faces unprecedented research costs for autonomous and electric vehicles, while at the same time continuing to develop cars and trucks powered by internal combustion engines.
“The last thing one of the world’s biggest automakers needs is the disruption caused by an investigation into the behavior of a man who has towered over the global auto sector,” said Michael Hewson, chief market analyst at CMC Markets in London.
Nissan’s board is to meet Thursday to consider Ghosn’s fate. Renault, where Ghosn is also CEO, said its board will hold an emergency meeting soon, and experts say it is unlikely that he will be able to stay at the company or the broader alliance.
The brash Ghosn was once viewed as a savior in the auto business with the ability to turn around the two struggling companies. In 2006 he even proposed an alliance with global giant General Motors.
Bernstein’s Warburton wrote that Ghosn’s once-mighty reputation has been declining for years, while Krebs said Nissan never could meet Ghosn’s goal of 10 percent US market share even though it has relied on “bad behavior” such as heavy discounts and sales to rental car companies.
Saikawa reiterated Nissan’s commitment to the venture, while a Renault statement expressed “dedication to the defense of Renault’s interest in the alliance.”


Companies in Oman need government permission before hiring expats

Updated 09 December 2018
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Companies in Oman need government permission before hiring expats

  • A new traffic light-themed online system is currently being rolled out in Oman, in which companies’ Omanization quotas are being monitored
  • “The new system focuses on enhancing Omanization rates in the private establishments”

DUBAI: Oman-based companies will have to secure the Ministry of Manpower’s go ahead before they can hire expats, local daily Times of Oman reported this week.
A new traffic light-themed online system is currently being rolled out in Oman, in which companies’ Omanization quotas are being monitored.
Under this new system, companies that meet Omanization standards set by the government will receive a green signal online, allowing them to proceed with hiring expat employees.
Companies with unclear Omanization policies will be given a yellow signal, while companies that fall short of meeting their quotas will receive a red signal, barring them from moving forward with hiring expat employees.
“The new system focuses on enhancing Omanization rates in the private establishments,” said a ministry spokesperson.
The step taken by the government is part of the Omanization drive to recruit more of its citizens in private companies, a similar push is underway across the GCC where countries like Saudi Arabia and Kuwait have also been trying to increase the number of nationals in private sector employment.

Earlier this year, expat workers in the country faced a six-month visa ban across 87 industries, including media, engineering, marketing and sales, accounting and finance, IT, insurance, technicians, administration and HR.