Tensions Emerge Between Renault and Nissan Over Firing of Carlos Ghosn

Renault will not immediately remove Ghosn from his role as CEO, against the advice of the French government.

Carlos Ghosn will remain detained in a prison cell without bail for the next 10 days while his employers have mixed responses to the allegations surrounding their respective chairman. While Nissan and Mitsubishi are planning to oust Ghosn over claims that include “significant acts of misconduct,” Renault is standing by the Chairman and CEO, only appointing temporary individuals to fill the positions while Ghosn remains absent.

After a board meeting, a decision was made to allow Philippe Lagayette, CEO of J.P. Morgan France and fellow Renault board member, to act as interim chairman. To fill the CEO role, Renault’s board decided to grant the company’s COO, Thierry Bollore, the temporary title of Deputy CEO.

Tensions are beginning to form between the Renault-Nissan alliance, which Ghosn directly lead. Nissan had been investigating the chairman for several months at the tip of an insider whistleblower, however, it seems that the automaker had provided its findings only to Japanese prosecutors and not to Renault. As a result, the French manufacturer is looking to Nissan for its findings, stating that the evidence levied against Ghosn should be presented to Renault’s board for review “on the basis of the principles of transparency, trust and mutual respect set forth in the Alliance Charter.”

The decision to keep Ghosn on as CEO and chairman goes against recommendations from French Finance Minister Bruno Le Maire, who earlier this week said that Ghosn is “no longer in a position” to lead Renault. Choosing not to immediately remove Ghosn is in direct opposition to a major shareholder’s wishes, as the French government owns a 15 percent stake in Renault.

Renault is not disregarding the charges against its CEO but has rather decided to pause Ghosn’s involvement until it can launch its own investigation into Nissan’s findings. Though the automaker is likely evaluating a scenario in which Ghosn is no longer involved in the day-to-day operations of the company, it will not take immediate actions on Ghosn’s role in the company. There has been no word of how this particular speedbump will affect the Renault-Nissan partnership, nor if Mitsubishi or AvtoVaz will be impacted.