On Monday, the French automaker Renault (RENA.PA) and its Japanese ally Nissan (7201.T) reached a comprehensive agreement to restructure their 20-year alliance, putting them on an equal footing.
The alliance, which was established in 1999 and has since expanded to include junior partner Mitsubishi Motors (7211.T), has long been dominated by Carlos Ghosn, a former senior executive at Renault and Nissan.
Nissan received a 15% share in Renault, equal to the French government, but was denied voting rights.
In contrast, Renault, which at the period was saving Nissan, acquired a 43% stake in its friend Japan, giving France a strong position that has long been a source of controversy.
Following Ghosn’s indictment on suspicion of financial wrongdoing in late 2018 and subsequent removal as alliance chairman, the alliance was rocked.
A timeline of significant occasions in the alliance’s past is provided below.
1996 As Renault faced with declining profitability, Ghosn joined the company as executive vice president. He revives his title as “Le Cost Killer” the following year when he announces a 20 billion franc cost-cutting strategy. By the end of 1998, Renault’s profitability has increased threefold.
1999 Nissan, which is drowning in debt and has been losing money for the past three years, is saved by Renault in March. In order to get Nissan back to being profitable in the 2000 fiscal year, Ghosn outlines his “Nissan Revival Plan.”
Nissan achieves its objectives a year ahead of time after reducing 21,000 employees, or 14% of the population, closing several plants, and reorganising its corporate structure. In Japan, Ghosn is celebrated as a corporate icon.
Nissan names Ghosn its CEO in 2000. Nissan accounts for about half of Renault’s yearly net earnings by the end of 2000.
2002 Nissan releases details of their “Nissan 180” three-year program, which aims to grow global car sales by 1 million units by 2005.
2005 Nissan announced a new three-year plan after falling short of its sales goal. Ghosn takes over as Renault’s CEO and president.
Nissan once again falls short of its primary financial goals in 2008. The automaker releases a new five-year strategy, but because of the economic crisis, it is later abandoned.
In 2013, Renault and Nissan unveiled a joint proposal for producing cars at a low cost. The two groups further consolidate their operations the following year with a goal of saving 10 billion euros ($11 billion) annually by roughly 2022.
Nissan acquires a majority share in Mitsubishi in 2016. The appointment of Ghosn as chairman makes him the head of all three partners.
2017 Although Nissan still falls short of several goals, both Nissan and Renault generate record operating profits. Together, the alliance sells upwards of 10 million vehicles worldwide, ranking it among the largest automakers.
2018 Ghosn is detained in Japan on suspicion of concealing his pay for more than ten years. He is charged with a variety of offences, including misusing Nissan’s finances for personal gain. Ghosn, who has denied misconduct, is removed from his position as alliance chairman.
2019 Following Ghosn’s arrest, Nissan and Renault are in a state of disarray. As profits keep declining, both automakers elect new boards. While Makoto Uchida takes over as Nissan’s CEO, the alliance appoints Michelin industry veteran Jean-Dominique Senard as its new chairman.
After Nissan rebukes Renault’s attempt to strengthen its financial connections with the Japanese automaker, tensions rise.
Ghosn leaves Japan on a chartered jet on December 29. He eventually makes it to Lebanon, the country of his upbringing, where he is forbidden from leaving but is still shielded from extradition.
2020 In order to increase its liquidity as a result of the COVID-19 problem, which has caused losses for both automakers, Renault obtains a 5 billion euro state-backed loan. In July, Luca De Meo takes over as CEO of the French company. Senard, the chairman of the alliance, says a merger of the car-making partners is not necessary for them to be effective.
