Renault and Nissan are desperate for help. The alliance that Carlos Ghosn formed may be their only hope

Already in the midst of tremendous pressure to reduce sales and profits in 2019, declining global car demand this year could put much more pressure on French and Japanese companies together to cut costs and share the burden of a new generation of electric vehicles.

Craftsmen have never sunk or collaborated since 1999 when collaborating on partners, strategies and product development. Together with junior partner Mitsubishi Motors, the unique industry alliance employs around 450,000 people and in 2018 it sells roughly one in every nine cars worldwide.

Yet the partnership began its third decade in turmoil. The 2018 arrest Carlos Ghosn, a former alliance director, is an expert on changing Renault and Nissan’s business credentials, both of whom have questioned multiple changes in driver leadership, questions about their strategy and confusion. sputtering relationship Revealed its usefulness.

Renault took part in negotiations for annexation with a European rival, and the big question was how the alliance would recover this fate in North America, where Nissan is a key player, but not its French rival. Analysts also raised questions about cultural differences across organizations.

Nissan (NSANF) And Renault (RNLSY), Which is connected through an equity series, denies in January that they were breaking up. The coronavirus then hits, sinking deeper into the crisis, and drivers are expected to unveil it on Wednesday.
According to Japan, Nissan is preparing to reduce its global production capacity by 20% and close a plant in Barcelona. Nikkei Asian Review. According to Japanese media, Nissan could reduce its workforce by 20,000. Renault could also stop making two popular models in Spain and move those products to Nissan’s huge plant in England, the said. Financial times.

The companies still maintain separate production facilities. Sharing production at the plant in Sunderland could be a sign that artisans are bridging their gaps and responding to the crisis by helping each other cut costs.

Ghosn, who was arrested on charges of defrauding Ayesha, has always denied any wrongdoing. He expected companies to come along Too close together, And he pleaded guilty to Nissan’s conspiracy to arrest him with the aim of preventing further integration with Renlo. Nissan debates this Descriptive.

According to Nikki, Renault and Nissan are looking at manufacturing facilities for the South America-Southeast Asia partnership elsewhere in Europe. For example, Nissan could start manufacturing Renault vehicles at plants in Brazil. Companies are also hopeful of increasing the number of parts that can be shared in their vehicles and accelerating plans to create shared vehicle platforms.

The deepening of the commitment will mark a major change: as last year, Renault sought outside the alliance to cut spending, through merger talks with Fiat Chrysler (FCAU). The Italian-American firm agreed to merge with the owners of Pewet and Citroen and closed another possible way for Renault to cooperate.

Nissan and Renault spokesmen declined to comment Monday.

Renault and Nissan were already fighting

Reno got into trouble before the epidemic hit. The French carmaker reported Its worst financial performance in a decade last year, where profits fell 99% to just 19 19 million (21 21 million). Its share price has fallen 69% since the beginning of 2019.

Last April, the company’s worldwide sales fell by nearly 70% due to the epidemic plotting in Europe and North America. The company shut down production at its 12 facilities in France in mid-March, only to begin work on most of the plant this month.

There has also been unrest in the leadership ranks, with Ghosn’s immediate successor as CEO, Thierry Bolori, condemned the “coup” after he resigned last October. Bolore’s successor, Luca de Mayo, Does not start work until July.

French Finance Minister Bruno Le Maire warned on Friday Renault is in “serious financial trouble”. “Renault could disappear,” he told Europe 1 Radio.

The French government is negotiating a 5 5 billion loan (5. 5.4 billion) for a company that owns 15% of Renault and is not currently approved by Le Mayer. The finance minister said last week that Renault must not close a factory north of Paris – one of the few products currently manufactured by Nissan.

“We sign when we know what Renault’s strategy is,” Le Maire told the radio station. The company’s plans must include transfers to more environmentally friendly vehicles. “We want Renault to be more productive and to be able to produce more of its vehicles, especially electric, in France,” he added.

Nissan, which reported its 2012 financial results on Thursday, reported four-quarters of its declining profits. Operating profit fell to 54.3 billion yen (4 504 million) for the last three months of December, down 83% from the same quarter a year earlier.

– Hannah Giadi contributed to the reporting.

About the author: Dale Freeman

Typical organizer. Pop culture fanatic. Wannabe entrepreneur. Creator. Beer nerd.

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