His clan supports him. Fifteen days after the night withdrawal of its offer of merger between Fiat Chrysler (FCA) and Renault Last week, John Elkann received the support of his family at the general meeting of Giovanni Agnelli BV, the annual grandmother of the family holding company. The Renault project is his idea, and “it is to him that will be the praise or reproach, depending on how the case ends,” said a source close to Agnelli at the “Wall Street Journal” .
Can the business bounce? In the short or medium term, everything remains open. In Paris, Milan, Detroit and Tokyo, the good fairies of the union are busy in the background to change the terms of the previous marriage contract to make it acceptable in Paris, Turin, Detroit and Yokohama. Without guarantee of results.
Tame the State and Nissan
“Nothing is currently underway,” says a source close to Renault, where it is recalled that the priority is the restoration of the Renault-Nissan Alliance. If he says he still supports in principle the principle of a Franco-Italian rapprochement, Bruno Le Maire, the Minister of the Economy, has hammered in recent days to Jean-Dominique Senard that it was necessary to rebuild and solidify the link with Nissan before anything else.
Proponents of the merger phosphorent, but discreetly, to coax the French state and Nissan, the two major shareholders of Losange. The first wants sufficiently strong guarantees on the French anchoring of the possible team, the second absolutely to be involved if new concrete negotiations arise. “Tricolor pledges must be given to the state, and Nissan and Mitsubishi must be involved in the discussions and be able to benefit from the association,” the same source confirms.
In Paris, some have been able to come up with the idea of creating a block of French shareholders made up of institutional investors to support the State Investment Agency (APE) in Renault’s capital, and, where applicable, in France. Fiat Renault BV. “Renault does not want to be swallowed by Fiat Chrysler, and vice versa. It must be a 50-50 marriage, “says a French source.
In Turin, it is said to be always open to discussion, but it is estimated that the proposal was balanced and is admitted scalded by the previous turnaround of a French state deemed too unpredictable. “The bond of trust with the state has begun,” says a close Agnelli.
And the Alliance?
It also remains to convince the Japanese side, who may well take the opportunity to demand the review of its capital ties with Renault, as it has claimed for several years. During his recent trip to Japan, Bruno Le Maire had raised the prospect of a decline in Renault’s stake in Nissan. What the management of Renault could accept, but only in exchange for some counterparties to specify … In the meantime and in case, Toby Myerson, a man of confidence of John Elkann, made the trip last week in Japan to open a channel of communication with Nissan.
The complexity of all these arrangements is that they must be validated by Renault and Nissan executives, whose positions can sometimes be fragile. And especially that they require a certain time to reach, a priori. Now, time is something that Fiat Chrysler does not have, unlike Renault or Bercy. “To meet the CO2 standards in 2022, when its agreement with Tesla ends, FCA must find a partner by the end of the year. It takes two or three years to build cars on another’s technology, “says an industry expert.
If the Italian-American group misses the mark, he risks having to sign agreements to his disadvantage. The market conditions and the health of both parties can also evolve in a few months, which would endanger the entire 50-50 building. An alignment of planets never lasts long.