UNITED STATES (OBSERVATORY NEWS)
Renault shares hit a six-year low on Monday as investors worried that its 20-year-old alliance with Nissan, which has been sharing costs, had collapsed in the absence of Carlos Ghosn, the former head of the alliance.
The long-standing tension in the Franco-Japanese partnership has worsened after Ghosn was arrested in Tokyo in November 2018 on charges of financial crimes, charges that Ghosn denies.
After his dramatic flight from Japanese justice late last month, Ghosn described how he believed the Nissan and Renault alliance had gone astray, during a press briefing last week.
A Financial Times report on Monday about April executives’ contingency plans in anticipation of Renault’s secession appeared to speed up the sale of shares in the French company.
The shares closed down 2.82 percent and was the most declining on the French CAC 40 index. The stock has lost more than a third of its value since Ghosn was arrested and subsequently removed from the leadership of the coalition.
Ghosn’s criticism and loss of confidence among investors came in the process of a transition within Renault and Nissan to new executive leaders.
Informed sources said that the two companies are trying to formulate solutions to the problems their partnership has suffered from for a long time, and to launch new industrial projects. These efforts have not yet yielded tangible results.
And two sources close to Nissan said that one of the main sticking points since 2015 is the sharing of research and development costs in order to reach equitable new technologies and products.
And one of the sources said that this strategy did not sufficiently compensate Nissan for its work.
“On accurate measurement, Nissan production is in some cases twice the production of Renault,” he added.
A source familiar with the matter said that April requested an analysis of workloads and productivity for workers in Renault and Nissan.
The two companies hope that changes in top positions will result in a reset of the partnership, but informed sources said that divisions in senior management in Nissan complicate efforts to reform the coalition and launch new projects.
This article is written and prepared by our foreign editors writing for OBSERVATORY NEWS from different countries around the world – material edited and published by OBSERVATORY staff in our newsroom.
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