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A year on, Ghosn awaits trial while Renault, Nissan rebuild ties

Our Bureau | Updated on November 28, 2019 Published on November 28, 2019

The two automakers will now have to rebuild the process of trust and confidence in each other

It was on November 19 last year that Carlos Ghosn was arrested in Tokyo amid high drama. As Chairman of Renault and Nissan, he was riding high till then, with Mitsubishi added to his list of responsibilities.

The arrest, prompted by a whistleblower in Nissan, sent shockwaves across the world. After all, Ghosn was a heavyweight in automobile industry circles and the fact that he seemed to have been done in by a company he salvaged decades earlier only fuelled conspiracy theories.

Today, a year has gone by and the companies Ghosn headed are in dire need of help. He continues to be held in Japan under house arrest but is still in relatively better conditions after being detained for over 100 days in a Tokyo jail.

High-profile exits

Renault and Nissan have seen some high profile exits even as the partners are now attempting to put together a relationship that has virtually fallen apart following Ghosn’s arrest. Talks of a merger have been put aside with the top priority now being putting things back on track.

Nobody expected so much action to unfold within an alliance that was apparently going strong for two decades. It was Ghosn who spearheaded the Nissan revival during the turn of the century even while ally Renault strengthened its hold in the company with a 43 per cent stake.

Nissan, in turn, had 15 per cent in Renault but with no voting rights and this obvious sense of discrimination came to the fore, especially when the Japanese automaker was perceived to be the stronger of the two in later years. Never mind that it has virtually imploded now with huge sackings happening across its global operations and Ghosn’s pet project, Datsun, expected to face the axe, too.

The resentment began building up within Nissan when talks of a merger with Renault started doing the rounds. Reports suggest that it was Ghosn who was pushing for this to happen. This was touted as among the key reasons for his shock arrest since Nissan was clearly opposed to this move.

Financial impropriety

Ghosn, of course, has been accused of financial impropriety and will be jailed for a pretty long while if found guilty. He insists that he is innocent and it remains to be seen what the final verdict will be. Japan’s ‘hostage justice’ system has meanwhile come under tremendous flak, where high-profile people like Ghosn are assumed guilty and find it almost impossible to be exonerated unless they confess to their ‘crimes’.

More importantly, Renault and Nissan will now have to rebuild the process of trust and confidence in each other. There was a lot of drama earlier this year when Fiat Chrysler Automobiles reached out to Renault with a merger proposal which did not include Nissan.

Naturally, the decades-long ally was upset and relations between the two further deteriorated till the French government stepped into the picture and directed Renault to focus on rebuilding ties with Nissan.

Meanwhile, Fiat Chrysler has now decided to merge with Groupe PSA, the maker of the Peugeot and Citroen brands. It was the kind of a marriage that someone like Ghosn would have loved to have sewn up.

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Published on November 28, 2019
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