28 January 2019

Carlos Ghosn is gone - who will drive the Alliance now?

Carlos Ghosn held down two CEO positions and built the world's biggest carmaking alliance but now it looks like there is no way back for him - he is languishing in a Tokyo jail cell and the machinations of power continue at Nissan and Renault.

Ghosn has now been replaced as CEO of Renault, after having been fired by both Nissan and Mitsubishi.

Ghosn often said that while he could do the two jobs, as CEO of Renault and of Nissan, he would have looked for at least two people to replace him. And this was before Mitsubishi joined the Alliance.

And what an organisation it is - nearly half a million people work in the triumvirate of carmakers, making more than 10 million vehicles a year. It is almost impossible to work out the number of supplier employees connected with the Alliance but almost every vendor on the planet has a stake in the organisation, at the first tier or all the way down to tier X.

Last week Renault unveiled its new leadership team, appointing chief operating officer Thierry Bolloré as CEO, and outgoing Michelin head Jean-Dominique Senard as chairman. Both of these men have the blessing of various unions and Renault has been quoted as saying that Senard would be the main point of contact for its Japanese partners for any discussion on the alliance's organization and evolution. ‘He will propose to the board of directors any new alliance agreement that he considers useful for Renault's future,’ it said.

And there is the key - just as the UK must renegotiate dozens of trade agreements just to maintain its status quo as a manufacturing and trading nation, so it seems that Renault will have to reorganise its global strategy.

Hiroto Saikawa, who took over from Ghosn as Nissan CEO last year but is now stepping aside, said that while it was too soon to ‘discuss a reformation of the alliance, we should be working now to improve things day to day for the company and maintain the status quo,’ and that ‘Dissolving it [the Alliance] would be difficult’.

One might assume that Renault might come out of any split as the stronger party, considering that the French carmaker, under Ghosn’s brilliant leadership, effectively saved Nissan, introducing exciting new models and advanced technology. But sadly it might turn out the other way round; Nissan and Mitsubishi are further advanced in EVs, hybrids and connected and autonomous vehicles.

This is no accident; Ghosn knew that the Japanese members of the Alliance were the best companies to spearhead new mobility solutions, and that the traditionally conservative French arm of the group was where quality and innovation in design would reap the most benefits hence the premium quality interior in the new Clio, for example.

Carlos Ghosn had a really long term vision of the Alliance’s future. I for one doubt that the multi-leadership that must follow will have that breadth and depth of knowledge, experience and the sheer ‘car sense’ to hold the companies together and make the daring and imaginative choices that Ghosn made in creating the greatest automotive organisation the world has seen.

Simon Duval Smith

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