Automotive

Renault, Nissan, Mitsubishi renew their alliance vows

Tensions triggered by ouster of Carlos Ghosn

(CNN) - Nissan, Renault and Mitsubishi are sticking with their alliance despite tensions triggered by the arrest and ouster of Carlos Ghosn as chairman of two of the companies.

In a joint statement Thursday, the carmakers said they had all "emphatically reiterated their strong commitment to the alliance" in the last few days. They did not elaborate.

Ghosn was arrested in Japan last week on suspicion of financial misconduct. The board of Mitsubishi (MMTOF) voted unanimously to remove him as chairman on Monday, days after Nissan (NSANY) took the same step.

Renault (RNSDF) has appointed an acting chief executive but has kept Ghosn in his positions of CEO and chairman.

The scandal has delivered a major shock to the industry alliance forged by Ghosn. Executives had gathered in Amsterdam on Thursday for a previously scheduled meeting at which they were expected to review the fallout.

Speaking on Sunday, French Economy Minister Bruno Le Maire said that Nissan had not yet shared details with Renault or his government, which owns 15% of the company. Renault has launched its own internal financial audit.

Ghosn had worked in recent years to deepen the alliance between Nissan and Renault, which Mitsubishi joined in 2016. Together, the three companies employ more than 470,000 people in nearly 200 countries.

But the partnership, which sells one in every nine cars worldwide, was unequal. Nissan, which is much bigger and sells more vehicles than Renault, holds only a 15% non-voting stake in the French company. Renault has a much more powerful 43% shareholding in Nissan.

Nissan CEO Hiroto Saikawa told employees at a town hall meeting on Monday that Ghosn had accumulated too much power at the top of the alliance, and he was concerned this was damaging business.

Some analysts have suggested that Nissan executives were also uncomfortable about the possibility of Renault and Ghosn seeking a full merger.

"The alliance has achieved unparalleled success in the past two decades. We remain fully committed to the alliance," Thursday's statement from the trio added.

Ghosn was detained following an internal investigation at Nissan that revealed "significant acts of misconduct" over many years, including understating his income in financial reports and misusing company assets.

Prosecutors allege that he and another Nissan director, Greg Kelly, collaborated to understate Ghosn's income by about 5 billion yen ($44 million) over a five-year period ending in March 2015.

Japanese prosecutors said Thursday that they are continuing to question Ghosn, who remains in custody. Ghosn has denied wrongdoing, according to Japanese public broadcaster NHK.


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