Renault-Nissan chief Carlos Ghosn to head Mitsubishi Motors: report2 min read . Updated: 19 Oct 2016, 07:14 PM IST
Nissan is acquiring a 34% stake in Mitsubishi Motors, which sought a rescue following an admission that it improperly measured for fuel economy, manipulated testing data
Tokyo: Nissan Motor Co. and Renault SA chairman Carlos Ghosn is set to add that title at Mitsubishi Motors Corp., according to people with knowledge of the matter, putting him on track to become the first executive to head three different automakers at the same time.
Nissan is acquiring a 34% stake in Mitsubishi Motors, which sought a rescue following an admission that it improperly measured for fuel economy and manipulated testing data. Mitsubishi Motors on Wednesday forecast a steeper loss of ¥240 billion ($2.3 billion) for the fiscal year ending 31 March because of costs tied to the scandal. The Tokyo-based automaker had earlier predicted a deficit of ¥145 billion, which would be its first loss in eight years.
“It’s easier for him to do things he did at Nissan, such as combining platforms, cutting costs and even closing plants," said Koji Endo, a Tokyo-based auto analyst at SBI Securities Co. “In order to implement such massive restructuring, you need someone as powerful as Ghosn to get things going."
A Renault-Nissan-Mitsubishi alliance would create the world’s fourth-largest automotive group. Ghosn, 62, who is both chairman and chief executive officer at Nissan and Renault, is highly regarded in the auto industry for being able to turn around flagging companies and is known for his sometimes brutal cost cutting.
After his radical makeovers of France’s Renault beginning in the 1990s and Nissan in the early 2000s, Ghosn earned the nickname “Le Cost Killer." Taking over as Nissan’s president, he brought the then-struggling company back from the brink by breaking up its so-called keiretsu network of suppliers, shutting plants and leveraging an alliance with Renault.
Yokohama, Japan-based Nissan has said it expects to close the deal before the end of the year. Two minicars Mitsubishi Motors produces for Nissan through a joint venture were among the models that initiated the company’s woes in April.
Not everyone is in favour of Ghosn taking on the chairmanship of a third automaker.
“I think he has enough work to be done at both Renault and Nissan," said Hans-Peter Wodniok, a Frankfurt-based analyst with AlphaValue. “He should also spend all his time in these two companies rather than taking on another job in Japan."
Renault unions are also wondering how Ghosn will divide up his time with his new responsibilities. “The question is: can he wear three hats and do a good job?" Bruno Aziere, a representative of the CFE-CGC union at Renault, said by phone. “As with all the companies he took over, before building the alliance, he focuses on reconstructing the operations of the company he’s just taken over."
Franck Daout from the CFDT union said the centralization of powers in the hands of Ghosn could be an issue in case he is unwell or when the time for succession comes, although “we are conscious that he is well surrounded" by a team that helps him handle his responsibilities. Still, “how can he have enough time to devote himself to all entities?" said Daout.
A spokeswoman of the Renault-Nissan alliance called the report of Ghosn’s appointment “speculation," declining to comment further. Mitsubishi Motors spokesman Shinji Akiyama declined to confirm Ghosn’s appointment. A Nissan spokesman reiterated the deal to buy the strategic stake is in process, declining to comment on the appointment.
Mitsubishi Motors shares surged 7.9% to close at ¥522 in Tokyo after the Nikkei reported Ghosn’s appointment, while Nissan gained 0.5% to ¥1,004.50. Renault’s stock rose 0.8% to €77.28 at 12:25pm in Paris. Bloomberg