French Government Calls for Carlos Ghosn to Be Replaced as Renault’s Leader – The New York Times

PARIS — For nearly three months, as its chairman and chief executive, Carlos Ghosn, remained jailed in Tokyo on allegations of financial misconduct, the French carmaker Renault stood by him.

But with Mr. Ghosn now facing the prospect of being detained for an extended period after a Tokyo court on Tuesday rejected his bail request, the company is set to cut ties with the man who has been its star executive for more than 15 years.

On Wednesday, the French government, Renault’s largest shareholder, called on the company to replace Mr. Ghosn and install new leadership in the coming days.

“We now must move to a new phase,” Bruno Le Maire, France’s finance minister, said in an interview on the French television channel LCI. He added, “I have always said that if Carlos Ghosn were to be durably incapacitated, we’d have to move on to something else, and we’re there now.”

Being ousted by a company that had resisted doing so would be the latest turn in a swift, stunning fall from grace for Mr. Ghosn, a larger-than-life car industry figure who forged a global business empire that bound Renault, Nissan and Mitsubishi Motors together in what was known as the Alliance.

The public push for Mr. Ghosn’s removal from Renault came after senior French officials flew to Tokyo after the Tuesday bail hearing. Martin Vial, one of two French government representatives on the Renault board, and Emmanuel Moulin, Mr. Le Maire’s chief of staff, are expected to meet Japanese officials and Nissan stakeholders during the trip, which was planned a few days ago, according to a Finance Ministry spokeswoman.

The carmakers must move quickly to try to put the blowup behind them.

Demand for cars in China, the United States and Europe, the three biggest markets, is falling. Analysts say the partnership that Renault and Nissan founded in 1999 to share purchasing and expertise is essential if the companies are to stay competitive in an industry where size provides a crucial advantage.

In a nod to the importance of scale, Ford Motor and Volkswagen outlined on Monday what they hope will become their own broad alliance to speed the development of electric and self-driving cars, potentially creating competition for the Renault-Nissan-Mitsubishi alliance on that front.

Nissan and Mitsubishi removed Mr. Ghosn from their boards immediately after his initial arrest on Nov. 19, but Renault and the French government have maintained that he had a “presumption of innocence.” Privately, though, succession plans were being prepared in case of a prolonged detention. Because Mr. Ghosn still faces a long trial in Japan, he cannot carry out his executive functions.

Appointing a successor to Mr. Ghosn would not necessarily mean Renault considered him guilty of wrongdoing, but could instead reflect his inability to perform his duties from jail, where, his family says, the spartan conditions have also harmed his health.

On Monday, Mr. Ghosn’s wife, Carole, published a letter to Human Rights Watch, a global advocacy group, calling her husband’s detention “a case study in the realities of a draconian system.” She said that Mr. Ghosn had lost almost seven pounds in two weeks of mostly eating rice and barley, and that he had been denied medication and allowed to bathe only two or three times a week.

Renault’s lawyers are still reviewing evidence that Nissan has presented in the case against Mr. Ghosn, in which Japanese prosecutors have accused him of understating his income for years and improperly transferring personal losses to Nissan’s books in 2008. He has denied all charges.

A top aide to Mr. Ghosn, Greg Kelly, was arrested on a related charge and released on bail on Christmas Day after more than a month in jail. Mr. Kelly has also denied the charges against him.

The case has taken on a political dimension in France, where President Emmanuel Macron is facing scrutiny as a result of the so-called Yellow Vest protests against income inequality and the declining purchasing power of the country’s working-class residents. The alliance has employees around the world, and Renault, with over 47,000 workers, is one of France’s biggest employers.

Mr. Le Maire said the decision to push for the carmaker to replace Mr. Ghosn was linked to the need to preserve jobs and stability at the alliance. “Jobs are the priority,” he said in the television interview.

After Mr. Ghosn’s initial arrest, Renault appointed its chief operating officer, Thierry Bolloré, to assume day-to-day responsibilities as chief executive, and its lead independent director, Philippe Lagayette, as temporary chairman.

It is possible that Mr. Bolloré would now be appointed chief executive on a permanent basis. As for the chairman’s position, Mr. Le Maire urged in the television interview that Jean-Dominique Senard, the chief executive of the tire maker Michelin, be considered.

It is a challenging moment for Renault and Nissan. Renault’s new car sales in Europe have declined lately, diminishing the company’s share of its core market. In the United States, Nissan is facing the consequences of a strategy championed by Mr. Ghosn that focused on winning market share through discounts at the expense of profits. Nissan is trying to cut back on the discounts just as the overall market enters a downturn.

Renault still relies on financial contributions from Nissan, the alliance’s dominant performer, and some Renault officials are concerned that Nissan’s sales and financial performance have been slipping.

The companies’ relationship has been strained by suspicions in France that Nissan may be using the vacuum left by Mr. Ghosn’s arrest to reshape the alliance’s balance of power. Renault owns a 43 percent stake in Nissan, while Nissan holds a 15 percent share in Renault that does not carry voting rights.

Nissan has been seeking a rebalancing of the alliance since the French government abruptly doubled its voting rights in 2015. In an effort to ease tension, Renault, which controls three seats on the Nissan board, agreed not to meddle in Nissan’s governance.

But the arrests of Mr. Ghosn and Mr. Kelly left two Nissan board seats vacant. And last month, Hiroto Saikawa, Nissan’s chief executive, declined a Renault request that an urgent meeting be held to appoint immediate replacements.

Instead, Nissan formed a committee that is to issue a report on the matter in March. That fanned suspicions in Paris that Nissan was maneuvering to prevent Renault from participating in alliance decision-making at a critical time.

Mr. Ghosn’s children have claimed separately that his arrest was the result of a revolt by his Nissan colleagues.

In a rare interview published in the French business daily Les Echos on Monday, Mr. Saikawa dismissed talk that Nissan had organized a plot to oust Mr. Ghosn as “absurd,” and contrary to the “serious” evidence he said the company had gathered.

Nissan’s internal investigation, he said, “suggests that we are dealing with deliberate manipulation and concealment.”

In the interview, Mr. Saikawa did not press the point about rebalancing the alliance, while playing down questions about how Nissan could have overlooked the alleged improprieties by Mr. Ghosn that stretched back years.

Mr. Saikawa said in the interview with Les Echos that he was certain that if Renault directors, who have not yet seen the documents handed over by Nissan, had access to the full file, they would “draw the same conclusions we did.”

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