Posted on Nov 17, 2019 at 6:00 pm
It was a Monday, just a year ago. November 19, 2018, the automotive world is brutally plunged into total amazement. Carlos Ghosn, the icon of the sector, the man who has straightened Nissan and who alone manages three major manufacturers, is arrested by the Japanese police : he did not declare all his income to the stock market authorities, we learn quickly.
This is however only a small beginning compared to what we will discover next. The scandal will experience several twists, over more incredible revelations each other. The former CEO of Renault, Nissan and Mitsubishi, who still denies the facts he is accused of, is now awaiting trial on probation in Tokyo.
Renewed governance
In the companies concerned, Renault and Nissan, the case caused a real earthquake. In a year, many certitudes have collapsed. The two builders have changed governance, both at the board level and at the directorate level: Hiroto Saikawa, at Nissan , and Thierry Bolloré, at Renault , both left their positions last October, a few days apart.
Appointed in January Jean-Dominique Senard, president of Renault and the Alliance, finally sees the end of the tunnel. “He has done a lot of work to lay the foundations for a new beginning,” said one of his relatives today. In fact, the task of the former boss of Michelin will not be a sinecure, as the situation was atypical and the road sown with pitfalls.
Alliance in neutral
Everything was already germinating well before the famous November 19, 2018. Not only Carlos Ghosn had not really prepared his succession, but he bears a large part of responsibility in the difficulties that plague today the two manufacturers: race volumes, insufficient preparation facing the CO2 wall, renewal too timid range.
Not to mention the Alliance, stalled. “Basically, the case played a double revealing role. She showed that the Alliance was no longer working, but also that Carlos Ghosn did not control what was happening in the companies: he did not see anything coming! “Says Bernard Jullien, industry expert and lecturer at the University of Bordeaux.
Oil on fire
The long months that have passed have in fact exposed the flaws of an Alliance that Carlos Ghosn described as solid. Jean-Dominique Senard says willingly to have fallen from above while discovering the reality of things. “There were frustrations, people did not talk anymore, they even lied to each other! The decisions made at the top were not applied by the teams, “says a good connoisseur of the group.
While the primary mission entrusted to him by the state is to restore the Alliance, the new president will take time to understand how much confidence is being degraded – despite the creation, with great fanfare, in March, of a new Council of the Alliance. Not only do Hiroto Saikawa and Thierry Bolloré look like earthenware dogs, but other leaders in both groups continue to blow hot and cold behind the scenes, throwing oil on the fire.
Warnings on results
In April, leaks on a merge scenario Jean-Dominique Senard has ordered bankers (a pattern among others, has always been claimed at Renault) does not help the atmosphere. At the end of May, the planned merger with Fiat Chrysler, to which Nissan was not associated upstream, tensions in the Japanese group . Mid-June, Jean-Dominique Senard must also raise his voice for to impose Thierry Bolloré on the Nissan board. To the chagrin of Japanese leaders who have never digested the adhesion of Carlos Ghosn’s right arm to the anti-Renault conspiracy theory.
At the same time, the financial situation of the two companies is deteriorating at a fast pace. V. Still in good shape at the beginning of 2018, they chained the bad news. Nissan saw its profits plummet month after month and plans a heavy restructuring plan, while Renault is struggling to generate cash. Both manufacturers have just launched warnings on results. For a year, their stock prices have plummeted by 30% each, returning to their level of six or seven years ago. ” It’s a disaster. In twelve months, we have destroyed twenty years of history! A financial analyst grieves.
Rotten situation
With the financial community anyway, a thread broke. “Last November, nearly 80% of analysts were buying. Today, it’s 33%, “says Gaëtan Toulemonde, at Deutsche Bank. The market capitalization of Renault fell to 13 billion euros, of which 10 billion related to Nissan, when Volkswagen reaches 90 billion, and Toyota 187 billion. “It is difficult to be positive on the title, except to say that it is not expensive,” slice another analyst.
It is only today, with staffs better disposed towards the Alliance, that Jean-Dominique Senard can really hope to revive the partnership. “Finally, the case has cleaned up a bad situation. Too bad it took a year! Says an expert. Would it have been possible to go faster? “A decision of this kind can only be made when it is ripe, except to risk creating additional earthquakes,” says a close associate of the president.
Nothing is won yet. But the difficulties facing both companies could also be a chance for the Alliance, strengthening more than ever the need to cooperate to reduce costs and accelerate recovery.