See More on Facebook

Analysis, Economics

Nissan to face challenges in setting up new leadership

The company will have to balance its desires with partners Renault.


Written by

Updated: November 26, 2018

After dismissing Carlos Ghosn as representative director and chairman, Nissan Motor Co. is moving toward building a new management structure, a task expected to face challenges as it must take Renault SA’s desires into consideration.

According to sources, Nissan has an agreement with Renault, Nissan’s largest shareholder, that someone from the French company will fill a top executive role at the Japanese automaker.

Leaders from the alliance between Nissan, Renault and Mitsubishi Motors Corp. are scheduled to meet this week to hold discussions.

For Nissan, the immediate focus is to name a successor to Ghosn.

Currently, the company has no chairman after his dismissal was decided at an extraordinary board meeting on Thursday.

The automaker’s articles of incorporation, which govern its organization and activities, stipulate that a chairperson or cochairperson call and chair meetings of the board of directors. As Ghosn’s arrest was an emergency situation, Thursday’s meeting was called by another director.

Nissan aims to decide on a successor as soon as possible to return its management to a normal situation.

At the extraordinary board meeting, it was decided that a committee made up of three outside directors would select and propose Ghosn’s successor from among the current directors. The panel’s proposal will be made at a board meeting in December.

How Nissan will honor its agreement to have a top executive from Renault will likely be an issue.

The online edition of The Wall Street Journal reported Thursday that prior to the extraordinary board meeting, Nissan told Renault that it would not allow the French company to name Ghosn’s successor.

Nissan is also considering holding an extraordinary shareholders meetings before its regular meeting in June to dismiss Ghosn and Greg Kelly as directors. Kelly was also arrested in connection with the Ghosn case.

Dismissals of directors must be approved at a general shareholders meeting. However, it is unclear how Renault will respond, as the French firm has decided not to dismiss Ghosn as its chief executive officer.

Selecting new directors, who will be nominated at the extraordinary shareholders meeting, would be difficult without Renault’s approval. To obtain Renault’s understanding, Nissan is considering sending President and Chief Executive Officer Hiroto Saikawa and other executives to France to offer an explanation.

However, Saikawa and other board members could face questions if they remain as directors because of their responsibility in allowing Ghosn’s financial misconduct. Nissan is expected to set up a third-party panel to propose improvement measures on corporate governance and executive compensation.

‘Distorted’ capital ties

Top executives from Nissan, Renault and Mitsubishi are scheduled to meet this week in the Netherlands, where a venture overseeing their alliance is located. This is a regular meeting that had already been scheduled before Ghosn’s arrest, and those who cannot attend in person can take part via videoconferencing, according to sources.

Renault has the power to select the leader of the venture. As Ghosn has handled strategy for the alliance thus far, future management of the alliance will likely become a challenge.

Nissan wants to reexamine its capital relationship with Renault, which currently owns 43.4 percent of Nissan, while the Japanese company only has a 15 percent stake in its French partner. A senior Nissan executive described this capital relationship as “distorted.”

Meanwhile, the French government, which owns 15 percent of Renault, reportedly wants to see the two automakers build stronger ties to achieve an alliance “that cannot go backward.” As such a development could bring more jobs to France, its government is unlikely to allow Renault’s influence over Nissan to decline.



Enjoyed this story? Share it.


The Japan News
About the Author: The Japan News is published by The Yomiuri Shimbun, which boasts the largest circulation in the world.

Eastern Briefings

All you need to know about Asia


Our Eastern Briefings Newsletter presents curated stories from 22 Asian newspapers from South, Southeast and Northeast Asia.

Sign up and stay updated with the latest news.



By providing us with your email address, you agree to our Privacy Policy and Terms of Service.

View Today's Newsletter Here

Analysis, Economics

World Bank, Pakistan reach massive loan deal

Pakistan on Tuesday signed three loan agreements worth a total of $918 million with the World Bank. Adviser to the Prime Minister on Finance, Revenue and Economic Affairs Dr Abdul Hafeez Shaikh witnessed the signing of the agreement between Country Director World Bank Patchamuthu Illangovan and Economic Affairs Division Secretary Noor Ahmed. The representatives of the Higher Education Commission (HEC) and Government of Khyber Pakhtunkhwa signed their respective project agreements. After the agreements were signed, the World Bank’s country director held a meeting with the Dr Sheikh, who thanked the World Bank “for extending their continuous support to Pakistan’s government in its efforts to achieve the sustainable economic development of the country.” The details of the three project the funds will be used for are as follows: ‘Pakistan Raises Revenue P


By Dawn
June 19, 2019

Analysis, Economics

Southeast Asia sugar industry discusses strategies as global deficit looms

The meeting took place in Ho Chi Minh city. There will be a global sugar deficit of about 2.5 million tonnes in 2019-20, and prices are expected to harden, the fourth meeting of the ASEAN Sugar Alliance heard in HCM City yesterday. Sasathorn Sanguandeekul, market analyst, futures trading and risk management at Thailand’s MITR Phol Sugar Corp Ltd, said in 2018-19 — the crop starts annually in September — there was a surplus of two million tonnes. A deficit would occur this year mostly due to a reduction in output in major sugar producing countries, including Thailand, he said. “In 2019-20 with the expectation of reduction in Thailand and India, Asia should have a deficit of around 9.5 million tonnes.” Output in Brazil, the world’s largest sugar producer and exporter, in 2018-19 “decreased to 26.5 million tonnes due to ageing canes, drought and low sugar mix r


By Viet Nam News
June 18, 2019

Analysis, Economics

Vietnam to be among world’s most dynamic markets by 2030

The country has reached amazing levels of progress in the last two decades. With an emerging market economy and continued strong growth, Vietnam is set to become one of the most dynamic markets in the world by 2030, according to Euromonitor International, a global market research company. An Hodgson, Euromonitor International’s income and expenditure research manager, said the company’s research database showed that urbanisation, with the associated concentration of income, wealth and population, would propel Việt Nam’s commercial success by 2030. Published last month, the research database has found that Vietnam will be the third biggest urban market by consumer numbers and fifth biggest by total spending in Southeast Asia. By 2030, the country’s urban consumer market will expand to 46 million consumers and $169 billion worth of spending. GDP growth is expected to rea


By Viet Nam News
June 13, 2019

Analysis, Economics

Li pledges to improve business climate

Li Keqiang says China taking steps to open up economy to foreign businesses Premier Li Keqiang reaffirmed China’s commitment to improving its business environment by deepening reforms to streamline administration and carrying out large-scale tax cuts and fee reductions. Li said in a meeting on Tuesday with World Bank President David Malpass that the country will bring its business environment more in line with market principles, international standards and the rule of law as part of efforts to promote high-quality development. He noted China’s cooperation with the World Bank, which is in keeping with its steps in reform and opening-up and benefited the country’s growth. The global landscape is complex and fluid, and the Chinese economy is facing various risks and challenges, he said. Further cooperation between China and the World Bank will help promote poverty reduction, narrow


By China Daily
June 12, 2019

Analysis, Economics

Restrictions on Chinese firms could drive up 5G cost

China is increasing pressure on consumers in a bid to end restriction on its major tech firms. Europe would have to pay an extra 55 billion euros ($62 billion) for 5G networks and suffer an 18-month technology delay if it bans telecom equipment purchases from top Chinese manufacturers, according to an industrial report. The report by the GSM Association, which represents 750 mobile operators worldwide, said Ericsson, Nokia and Samsung, the non-Chinese contenders in the 5G market, do not have the capacity to handle all of the shift from 3G and 4G networks to 5G in Europe while honoring contracts already signed in North America and Asia. Huawei and ZTE account for about 40 percent of the EU market, and Huawei is “currently a pioneer in 5G technology”, according to the GSM analysis, first reported by Reuters and Agence France-Presse on Friday. “A ban on Chinese v


By China Daily
June 11, 2019

Analysis, Economics

Malaysia finds mass influx of undocumented workers from Bangladesh

5,272 undocumented Bangladeshis held in Malaysia in 5 months. Malaysian immigration department has detained 5,272 Bangladeshi workers among other nationals between January 1 to June 4 this year amid the country’s stringent actions against undocumented foreign workers. During this time, the immigration department carried out 7,940 operations nationwide, involving checks on over 100,000 foreigners and took actions against 23,295 undocumented foreign workers, reports Malaysian newspaper Free Malaysia Today, quoting a statement by Malaysian Home Minister Muhyiddin Yassin on Sunday. Of those detained, 8,011 are Indonesians, 5,272 are Bangladeshis, and the rest include workers from Myanmar, Philippines and Thailand, the report read. “In the five months between January 1 and June 1, 2019, some 26,116 illegal immigrants were sent back to their respective countries,” the statement said. The n


By The Star
June 11, 2019