Joint management for Renault, Nissan

TOKYO, Oct. 30 -- A new joint-management company linking Renault SA and Nissan Motor Co. will have sole responsibility for decisions on the two carmakers' mid- and long-term planning, commonalities in products and powertrains, and financial-policy principles. It will not have operational authority over either company.

That is one of several changes in the Renault-Nissan relationship that will take place over the coming months, the two companies announced Tuesday.

Assuming regulatory approvals, the following other changes also are planned:

1. Renault will exercise warrants to raise its stake in Nissan to 44 percent from 36.8 percent currently.

2. Nissan will take a 15 percent stake in Renault through a reserve capital increase. Under French law, however, those ordinary shares will not carry any voting rights for Nissan.

Both share cross-holdings are in line with the original March 1999 Renault-Nissan agreement, and are expected to be completed by mid-2002.

3. After Nissan’s purchase of a Renault stake dilutes the French government's ownership of Renault to 37.6 percent from 44.22 percent now, the French government will reduce its stake further to 25 percent via a public offering at some unstated future date.

The new management company's president will be Renault Chairman and CEO Louis Schweitzer, and its vice president will be Nissan President and CEO Carlos Ghosn. Each will have three board votes at Renault-Nissan BV (RN BV), set up under Dutch law but headquartered in both Paris and Tokyo.

Nissan and Renault each will send another three executives to RN BV, with one vote per person.

RN BV will replace the Global Alliance Committee, the current governing body of the Renault-Nissan Alliance.

In addition, each company will add another non-executiv member to its board from its counterpart. Ghosn will represent Nissan on Renault's board, and Shemaya Levy will represent Renault on Nissan's board.

Ghosn said one reason for the changes was to "extract more performance from the alliance."

Specifically, he noted that Renault and Nissan currently are working on two shared platforms. That will rise to 10 "highly commonalized platforms with coordinated product plans," he said, while the eight powertrains that the two companies are exchanging now, will grow to eight common families of engines and seven families of gearboxes by 2010.

RN BV will make proposals to Renault and Nissan regarding such issues as major investments and significant changes in market or product coverage, but those decisions would be left to the two carmakers.

Here are the proposed members of RN BV:

President: Louis Schweitzer, Renault chairman and CEO

Vice president: Carlos Ghosn, Nissan President and CEO

(In alphabetical order)

Pierre-Alain de Smedt, Renault executive vice president for technology, engineering, manufacturing and purchasing;

Georges Douin, Renault executive vice president for product & strategic planning and international operations;

Francois Hinfray, Renault executive vice president for sales and marketing;

Hisayoshi Kojima, Nissan executive vice president for manufacturing, vehicle production engineering, powertrain, industrial machinery, and marine;

Norio Matsumura, Nissan executive vice president for global sales & marketing, North American operations, GOM operations, and global parts business;

Nobuo Okubo, Nissan executive vice president for customer service, technology and engineering development, vehicle 3-3-3 promotion office, and advanced engineering.

You can reach James B. Treece at jtreece@crain.com

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