Nissan, Renault temper powers of chairman in wake of Ghosn’s ouster

Former Nissan boss Carlos Ghosn’s request to attend Nissan’s board meeting was denied a Tokyo court. (AFP)
Updated 13 March 2019
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Nissan, Renault temper powers of chairman in wake of Ghosn’s ouster

  • Renault has started its own review of payments to Carlos Ghosn
  • French prosecutors have opened a preliminary inquiry into how he financed his 2016 wedding

YOKOHAMA, Japan: Japan’s Nissan Motor and France’s Renault said they would retool the world’s top car-making alliance to put themselves on more equal footing, breaking up the all-powerful chairmanship previously wielded by ousted boss Carlos Ghosn.

The removal of Ghosn, credited for rescuing Nissan from near-bankruptcy in 1999, had caused much uncertainty about the future of the alliance and some speculation the partnership could even unravel.

The companies, together with junior ally Mitsubishi Motors, on Tuesday said the chairman of Renault would serve as the head of the alliance but — in a critical sign of the rebalancing — not as chairman of Nissan.

Nissan has said that Ghosn wielded too much power, creating a lack of oversight and corporate governance. It was not clear who would become Nissan’s chairman, vacant since Ghosn was arrested in Japan in November.

But the automakers gave no indication of any immediate change in their cross-shareholding agreement, one which has given smaller Renault more sway over Nissan.

The so-called Restated Alliance Master Agreement that has bound them together so far remains intact, they said.

“We are fostering a new start of the alliance. There is nothing to do with the shareholdings and the cross-shareholdings that are still there and still in place,” Renault Chairman Jean-Dominique Senard said at a news conference.

“Our future lies in the efficiency of this alliance,” he told reporters at Nissan’s headquarters in Yokohama.

Senard also said he would not seek to be chairman of Nissan, but instead was a “natural candidate” to be vice-chairman.

Former Nissan chairman Ghosn was released on a $9 million bail last week after spending more than 100 days in a Tokyo detention center. He faces charges of under-reporting his salary at the Japanese automaker by about $82 million over nearly a decade — charges he has called “meritless.”

Ghosn, who has not spoken to media since his release, put in a request with a Tokyo court on Monday to attend Nissan’s board meeting the next day, but he was not given permission.

Under the terms of his bail, he would have needed the court’s nod to attend.

Ghosn will not hold a highly anticipated news conference until next week at the earliest and is not planning to attend Nissan’s shareholder meeting next month, his lawyer said.

“Mr. Ghosn wants to have some time to mull over what he’s going to say,” Junichiro Hironaka told reporters outside his Tokyo office after meeting with Ghosn throughout the day.

Ghosn left his lawyer’s office in the evening without taking questions from reporters.

In the wake of the scandal, Renault has started its own review of payments to Ghosn. French prosecutors have opened a preliminary inquiry into how he financed his 2016 wedding at the Chateau de Versailles, French media have reported.

His dramatic arrest and the detention exposed tensions between Nissan and top shareholder Renault, complicating the outlook for a partnership that is the world’s largest maker of automobiles, excluding heavy trucks.

Some at Nissan had been unhappy with Ghosn’s push for a deeper tie-up with Renault, which was seen as possibly including a full merger. Smaller Renault bought 43 percent of Nissan ahead of the 1999 rescue.

Nissan holds a 15 percent, non-voting stake in Renault, whose top shareholder is the French government.


British Steel collapses, threatening thousands of jobs

Updated 22 May 2019
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British Steel collapses, threatening thousands of jobs

LONDON: British Steel Ltd. has been ordered into liquidation as it struggles with industry-wide troubles and Brexit, threatening 5,000 workers and another 20,000 jobs in the supply chain.
The company had asked for a package of support to tackle issues related to Britain’s pending departure from the European Union. Talks with the government failed to secure a bailout, and the Insolvency Service announced the liquidation on Wednesday.
“The immediate priority following my appointment as liquidator of British Steel is to continue safe operation of the site,” said David Chapman, the official receiver, referring to the Scunthorpe plant in northeast England.
The company will continue to trade and supply its customers while Chapman considers options for the business. A team from financial firm EY will work with the receiver and all parties to “secure a solution.”
“To this end they have commenced a sale process to identify a purchaser for the businesses,” EY said in a statement.
The government said it had done all it could for the company, including providing a 120 million pound ($152 million) bridging facility to help meet emission trading compliance costs. Going further would not be lawful as it could be considered illegal state aid, Business Secretary Greg Clark said.
“I have been advised that it would be unlawful to provide a guarantee or loan on the terms of any proposals that the company or any other party has made,” he said.
Unions had called for the government to nationalize the business, but the government demurred.
The opposition Labour Party’s deputy leader, Tom Watson described the news as “devastating.”
“It is testament to the government’s industrial policy vacuum, and the farce of its failed Brexit,” he said in a tweet.
The crisis underscores the anxieties of British manufacturers, who have been demanding clarity around plans for Britain’s departure from the EU. Longstanding issues such as uncompetitive electricity prices also continue to deter investment in UK manufacturing, said Gareth Stace, the director-general of UK Steel, the trade association of the industry.
“Many of our challenges are far from unique to steel — the whole manufacturing sector is crying out for certainty over Brexit,” Stace said. “Unable to decipher the trading relationship the UK will have with its biggest market in just five months’ time, planning and decision making has become nightmarish in its complexity.”
Greybull Capital, which bought British Steel in 2016 for a nominal sum, said turning around the company was always going to be a challenge. It praised the trade union and management team, but said Brexit-related issues proved to be insurmountable.
“We are grateful to all those who supported British Steel on the attempted journey to resurrect this vital part of British industry,” it said in a statement.