The marriage between Renault and Nissan auto corporations seems to be cracking at the seams- and those cracks are spreading.
Last year, the former chairman Carlos Ghosn was pushing an ambitious plan to merge the two companies, until he was forced to resign, the result of official investigations into his questionable financial dealings. This and sluggish talks over a possible merger with Fiat-Chrysler have caused record disagreements between Renault Chairman Jean-Dominique Senard and his counterpart at Nissan, CEO Hiroto Saikawa.
Former Nissan-Renault chairman Carlos Ghosn's arrest led to a breakdown in relations between the two companies
In 1999, when the smaller Renault pulled crisis-ridden Nisan out of hot water, and took a huge chunk of the board and voting rights, this alliance looked so promising. They seemed perfect for each other, with Nissan’s strength in manufacturing capacity nicely balanced with Renault’s financial muscle and international exposure especially in Europe. Now, these two could be saying bye or seriously considering a re-defining of their relationship.
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The group currently includes Mitsubishi, making it a viable company to compete against auto behemoths Toyota Motor Co and Volkswagen- but only if they get their act together. The current crises puts the jobs of their combined 350,000 employees at stake. Nissan is the bigger corporation in terms of vehicle manufacture and combined, the group accounts for about 10 million units of various models manufactured each year.
An uncertain future looms for the group that includes Mitsubishi
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Following a letter transmitted to the Japanese company by Renault’s chairman, Nissan could legally cite interference in its internal affairs. Doing so, according to the 1999 agreement would enable Nissan to increase its current 15% non-voting stock to 25% voting rights stock.
While most pundits are certain to a large degree that both companies are not going to do something as drastic as separation, it is apparent that a mild to massive reorganization will ensue from this.