Investors Say Renault-Nissan Feud with France Isn’t Over

Investors tell the Financial Times that tensions between the Renault-Nissan alliance and the French government have been eased but not resolved, making a new confrontation likely.

Last week Carlos Ghosn, CEO of both carmakers, declared the squabble over control of the partnership and its members “behind us.” But the settlement left fundamental structural issues unchanged.

The 16-year-old alliance gives Renault, which owns 43% of Nissan, control over the Japanese company and the partnership. Nissan owns 15% of Renault but has no voting rights.

As head of both companies, Ghosn has been able to avoid potential problems caused by the obvious imbalance. But the stability was shaken last spring when France secretly raised its stake in Renault from 15% to 19.7%. The move will boost the state’s voting rights to about 27% in April, thereby giving it more power to shape business decisions by both car companies.

Last week France pledged to hold its voting rights to 20% in many instances and vowed not to interfere with Nissan operations. But the deal did not give Nissan the alliance voting rights it sought.

Analysts say the question of balance must be resolved before Ghosn, 51, steps down as CEO. Last week he told reporters it’s unlikely the partners will find a single replacement for him who has sufficient “legitimacy” for both companies.

A long-time Renault executive, Ghosn earned that stature by saving Nissan from bankruptcy 15 years ago and leading the company’s spectacular revival. Nissan now contributes most of the alliance’s revenue and profits.