Renault Board to Discuss Power Struggle with French Government

Renault SA’s directors plan an emergency meeting on Friday to review the rising power struggle with the French government for control of the company, Reuters reports.

The crisis threatens Renault’s highly successful but unbalanced alliance with Nissan Motor Co.

When the partnership began 16 years ago, Nissan was near collapse. Renault acquired 43% of Nissan, and Nissan gained a 15% stake in Renault. Today, the Japanese company contributes two-thirds of the alliance’s profit and generates seven times as much revenue as its French partner.

But under French law, Renault’s stake gives it control over both Nissan and the partnership. Nissan’s holding carries no voting rights. Renault’s board and Renault/Nissan CEO Carlos Ghosn are keen to better equalize the stakes and give Nissan greater clout in the venture.

The French state, which secretly hiked its stake in Renault from 15% to 19% in April, opposes any such change. The government also successfully thwarted the Renault board’s attempt to retain its one-share, one-vote policy. Instead, long-term shareholders, including the government, will gain double voting rights next spring.

The government has been clear that its priority is to prevent Renault from moving jobs out of France.