Renault and Nissan make peace in a deal to tighten oversight

FILE - In this March 12, 2019, photo, Renault Chairman Jean-Dominique Senard, left, and Nissan CEO Hiroto Saikawa speak at the start of a joint press conference following a board meeting at the Nissan headquarters in Yokohama, near Tokyo. Japanese automaker Nissan wasn’t consulted about a proposed merger between its French alliance partner Renault and Fiat Chrysler and has little say over the issue. Partnering with a colossal Renault-Fiat Chrysler could help Nissan slash costs on shared components and research. (AP Photo/Eugene Hoshiko, File)
FILE - In this March 12, 2019, photo, Renault Chairman Jean-Dominique Senard, left, and Nissan CEO Hiroto Saikawa speak at the start of a joint press conference following a board meeting at the Nissan headquarters in Yokohama, near Tokyo. Japanese automaker Nissan wasn’t consulted about a proposed merger between its French alliance partner Renault and Fiat Chrysler and has little say over the issue. Partnering with a colossal Renault-Fiat Chrysler could help Nissan slash costs on shared components and research. (AP Photo/Eugene Hoshiko, File)

Renault announced on Thursday it had settled a core dispute in its rocky relationship with Nissan ahead of a pivotal meeting of Nissan shareholders next week in Japan, in a deal that officials hope will allow both companies to focus on strengthening the world's largest auto alliance.

The companies had clashed over a Nissan plan, scheduled to be unveiled at the meeting, to strengthen corporate governance after the arrest of Carlos Ghosn, the former head of the Nissan-Renault-Mitsubishi alliance. Jean-Dominique Senard, Renault's chairman, had said he would refuse to back the changes unless Renault was given more representation on three committees being established to tighten oversight at Nissan.

Renault said Thursday that Nissan had accommodated its demands by allowing Thierry Bolloré, Renault's chief executive, to sit on one of the three panels, and Senard on another.

Renault said it "welcomes Nissan's decision to grant Renault's representatives a seat on the committees of the Nissan board."

It added: "The agreement reached on Renault's presence in Nissan's new governance confirms the spirit of dialogue and mutual respect that exists within the alliance."

Later, Nissan released a statement with the committee assignments, pending board approval, showing Senard serving on the nominating committee and Bolloré on the auditing committee.

The deal eases tensions at Nissan, which will now get Renault's backing to create board-level governance committees overseeing director nominations, executive compensation and audit matters. The panels are intended to enhance scrutiny of governance lapses that Nissan said allowed Ghosn to engage in financial wrongdoing. Ghosn denies all charges of financial misconduct.

The agreement is a sign that the alliance, which also includes Mitsubishi Motors of Japan, is trying to stabilize its administration. But it underscored how both companies have been distracted from the vital business of building and selling cars, seven months after Ghosn was toppled from power.

Renault is also smarting from the abrupt collapse of what was supposed to be a transformative merger deal this month with Fiat Chrysler, which withdrew its offer after the French government, which owns 15% of Renault, sought a number of concessions. The government, for its part, has said that it sought to delay a vote on the deal to ensure that Nissan was fully informed.

The fiasco dealt a blow to Senard, who lashed out at the French government last week in Paris during a packed meeting of Renault shareholders, saying he would defend Renault's interests at all costs.

At the meeting, he also explained that he would refuse to back Nissan's plans for the new governance committees unless Nissan allowed at least two Renault officials to be seated on them. Renault's board, he pointed out, has two Nissan officials, so it was only fair that Nissan reciprocate, he said.

Senard's forceful statement, announced shortly after the Fiat deal flopped, angered Nissan's chief executive, Hiroto Saikawa, who called Renault's demand "regrettable." Relations between Saikawa and Senard had already deteriorated in recent months after Renault proposed a merger of the two companies, something Nissan rejected outright.

France's finance minister, Bruno Le Maire, has been maneuvering to patch up the relationship with Nissan. Le Maire has been on a charm offensive in the French news media in recent days, taking to radio and television shows to emphasize the importance of Renault's relationship with Nissan, and of the need to strengthen the alliance.

He publicly urged Senard to back the governance reforms at Nissan, saying it "would send a positive sign on the strengthening of the alliance." Le Maire has even hinted that the French state might consider reducing its stake in Renault if it would lead to a "more solid" alliance.

Le Maire has also expressed hope that smoothing relations with Nissan could open the door again to renewed talks between Renault and Fiat Chrysler. Both companies have said that is unlikely.

Michael Manley, Fiat Chrysler's chief executive, was spotted in Paris over the weekend. Even so, he did not meet with Renault executives, according to two people with knowledge of the situation.

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