Maybe Carlos Ghosn Sucked Anyway

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Was Carlos Ghosn’s ouster and arrest part of a palace coup? And what even was Renault-Nissan? Oh, also, Elon wants a van. This is The Morning Shift for November 20, 2018.

1st Gear: What Was the Point of the Renault-Nissan Alliance?

There are lots of things in business that make sense. Big company buys smaller company, for instance, is something that we see all the time. But Renault-Nissan (and recently, with the addition of a troubled Mitsubishi sutured on), never really did. Here’s how it works:

  • Nissan, the much larger company of the two, like, literally 60 percent larger than Renault, took a 15 percent non-voting stake in Renault
  • Renault, the much smaller company of the two, has a 43.4 percent fully voting stake in Nissan
  • We’re not even going to even bother with Mitsubishi for our purposes

The end result of this is that Carlos Ghosn, who was the CEO of much-smaller Renault, somehow also became the CEO of the much-larger Nissan, effectively giving Renault control of Nissan. But it wasn’t a merger, not really. Back in 1999 when this whole thing came about, there was a lot of talk of strategic value and cost-sharing and whatnot. But Nissan and Renault, which are both in this very weird gray zone of one-company-but-not-really, don’t share platforms and engines, the natural consequence of two companies that are one company and like to do a bit of cost-sharing.


So instead of functioning like one company, they functioned more like two separate companies that happened to share the guy in charge. It was a bit like some sort of Habsburgian personal union, the sort of thing reserved for long-dead kings.

If you’re thinking that none of what I’m saying makes much sense, good. That seems to be the feeling it’s inducing in a lot of people now that Ghosn is out, according to Automotive News:

But in recent months, attention has increasingly turned to how the complex web of cross-shareholdings between the alliance partners might be simplified to ensure it can thrive following the eventual departure of its main architect.

In March, sources close to the matter told Reuters the alliance partners were discussing plans for a closer tie-up in which Nissan would acquire the bulk of the French state’s 15 percent stake in Renault.

Nissan has chafed at being under the control of a smaller company. Ghosn’s continued hold on power — he is CEO and chairman at Renault as well as chairman at Mitsubishi and CEO of the overall alliance holding company — has sparked concern that power is too centralized. Ghosn never anointed a successor to the top alliance post, and several chief operating officers at Renault departed on less-than-friendly terms.


And, as Automotive News sort of implies, the main benefit of the whole Renault-Nissan Alliance seemed to go towards one person, Carlos Ghosn, rather than the two companies.

The king is arrested, long live the maybe-free-soon independent companies of Renault and Nissan.


Also, Mitsubishi.

But like I said, we’re not even going to bother with Mitsubishi.

2nd Gear: Now Nissan Is Also Publicly Asking, ‘What Was the Point of the Renault-Nissan Alliance?’

Remember how I mentioned that Nissan is 60 percent larger than Renault? And how does THAT make sense?


Nissan is also asking this question, as Nissan CEO (Ghosn was the Chairman of Nissan for the past couple of years, while remaining CEO and Chairman of Renault, which effectively made him the Nissan CEO’s boss, but we’re getting away from ourselves here) Hiroto Saikawa asked yesterday, Reuters noted:

The Nissan CEO nevertheless took aim at a Renault-led alliance setup that “concentrates power in one individual”, and said a new board committee would examine its role in the scandal.

“In terms of structural issues, 43 percent is held by Renault and the head of Renault is currently serving as (chairman) of Nissan,” Saikawa said.

“Of course this isn’t the only cause, but it’s one of the factors or drivers. So the committee ... will have a deep dive on this issue as well.”


If a corporation is concerned about too much power residing with one individual, and it’s organizing a committee that “will have a deep dive on this issue,” you bet your ass they’ll come up with a recommendation on that very specific issue.

3rd Gear: Okay But France Is Publicly Asking ‘Hey So We’re Keeping the Renault-Nissan Alliance, Right Guys?’

Also France, the country, has a 15 percent stake in Renault, in case you were not aware. That means that France, the country, also has a massive stake in what happens to the Renault-Nissan Alliance, seeing as how it strongly favors Renault, and thus, the French state. And because of that, France would very much like to see this whole Renault-Nissan thing continue, if for nothing else that it gives France a very big say on what goes on at a major Japanese automaker.


But with Carlos Ghosn out, and with there being apparently no succession plan to Ghosn (and feel free to speculate as to Ghosn’s reasons for that), there seems to be nobody—especially nobody at Nissan—who cares about the Alliance, or is even in charge of the Alliance. You’ve got a Nissan CEO, probably someone in charge of running Renault, and then... that’s it. Just two companies holding stakes in each other, and the bigger one doesn’t particularly like that arrangement.

So the French government is stepping in to be like “hey, let’s get a successor to Ghosn in here, to preserve this Alliance, that we really do love,” Reuters reports:

The French state, which owns 15 percent of Renault, has begun to distance itself from Ghosn, a French citizen who was born in Brazil and is of Lebanese descent.

Renault’s board will meet later on Tuesday, a spokesman said. Sources familiar with the matter told Reuters it would discuss temporarily replacing Ghosn.

“Carlos Ghosn is no longer in a position where he is capable of leading Renault,” French Finance Minister Bruno Le Maire told France Info radio, calling on Renault to set up an interim management structure.“Renault has been weakened, which makes it all the more necessary to act quickly,” he said.


But like I said, this is all complicated by the fact that Renault is the one that controls Nissan, not the other way around. So if France wants to keep its power with Renault, and Renault wants to keep its grip on Nissan, Nissan might not find it so easy to get away.

4th Gear: Colorado Officially Adopts California Emissions Standards

Okay no more Ghosn-Nissan-Renault-France news, I promise. Only in this one specific blog though. Onto the rest of the news.


Even as the Trump administration battles California, pointlessly, over its emissions standards, even more states are adopting California’s rules. Colorado recently became the 13th state to adopt California’s requirements, joining all of these other states, Colorado Public Radio reports:

Cars sold in Colorado will have to adhere to stricter emissions standards starting in 2022. The state’s Air Quality Control Commission decided on Friday to adopt California’s vehicle emissions standards, which are higher than the federal targets. Under the rules, new vehicles sold in Colorado must average 36 miles per gallon by 2025.

The commission was acting on an order from Gov. John Hickenlooper. In June, he committed Colorado to low emission vehicle (LEV) standards.

“Colorado has a choice. This executive order calls for the state to adopt air quality standards that will protect our quality of life in Colorado,” Hickenlooper said in June. “Low emissions vehicles are increasingly popular with consumers and are better for our air. Every move we make to safeguard our environment is a move in the right direction.”


Go on, Coloradans. Enjoy that clean air. Breathe deep.

(Just kidding, global climate change is something that will affect every single person on this planet, except for the fabulously wealthy, and this is but a small and ultimately insignificant step on our road to hell. The only thing that will reverse the course we are currently on is an immediate and thorough overthrow of late-stage capitalism.)


5th Gear: Elon Wants A Van


Sure, Elon. We’ll believe it when we see it.


On this day in 1923, the U.S. Patent Office grants Patent No. 1,475,074 to 46-year-old inventor and newspaperman Garrett Morgan for his three-position traffic signal. Though Morgan’s was not the first traffic signal (that one had been installed in London in 1868), it was an important innovation nonetheless: By having a third position besides just “Stop” and “Go,” it regulated crossing vehicles more safely than earlier signals had.


Neutral: What Should We Have Gotten From The Renault-Nissan Alliance?

When the news of the Renault-Nissan Alliance first dropped, there were probably a lot of hopeful American gearheads who were wishing for some sort of funky Renault to land on our shores. That never happened.


But it should have. What weirdo Renault do you pine for? Give me a Renault Megane RS Trophy any day.