Currently reading: Renault angered by new French finance laws
French government secretly raises its stake in Renault and passes new laws in a bid to influence the firm’s operations
News
2 mins read
19 May 2015

Renault has been plunged into direct conflict with the French government after the government changed shareholding laws and then spent £880 million increasing its stake in the car manufacturer to 20%.

There is reportedly great concern within the Renault-Nissan Alliance about the French government’s level of influence because Renault also owns 45% of Nissan and effectively controls its successful Japanese partner.

Carlos Ghosn, CEO of the Renault-Nissan Alliance, was described in reports as being “furious” after he was out-manoeuvred by the French government in a conflict over new laws concerning the voting rights of long-term shareholders.

Ghosn had been in long-standing negotiations with 
the French government to 
try to prevent these new 
‘anti-speculation’ laws from being applied to the Renault-Nissan operation.

The French government introduced the new legislation earlier this year. It is intended to give shareholders double voting rights if they have 
held the stock for more than two years.

While Ghosn was in tense negotiations with the government, the state secretly increased its shareholding in Renault from 15% to 20%.

This stake was then unexpectedly used by the government to prevent Ghosn from passing a resolution to restrict Renault shareholders to ‘one share, one vote’.

The French government’s move to have more influence over Renault is likely to have been driven mainly by the 
fact that the vast majority of the best-selling Renault and Dacia models are now made outside France.

The French government has vowed to prevent its domestic manufacturing base from being hollowed out, although many analysts say France has notably high labour costs, which are putting its manufacturing industry under great pressure.

Moreover, Nissan’s success has meant that it is substantially outselling its French parent company. Of the 8.47 million cars sold globally by the alliance in 2014, just 2.7m came from the Renault/Dacia/Samsung brands.

The greater use of shared platforms and factories will make it easier for future Renault vehicles to be built outside France. Indeed, the highly successful Captur compact crossover is made in Spain, as is the upcoming Kadjar crossover. The 
Kadjar will also be built at Wuhan in China.

Even the current Mégane hatchback is made outside France, although the Scénic MPV is made on home ground. Although the new Espace and Laguna will be built in France, they are unlikely to be as big-selling as Renault’s small cars.

It’s not known if the French government will use its boardroom influence to prevent other new models from being built overseas. However, it seems possible it could argue that the next-generation Mégane should be built in France after the Captur and Kadjar were allocated to Renault’s Spanish plants.

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Halfabee 19 May 2015

Bye bye Renault

It's bad enough that the French government has effectively taken a controlling stake in Renault to protect French jobs: to do so in direct conflict with the management of the company beggars belief. Governments have no place running car companies. The end of Renault. Au revoir.
xxxx 19 May 2015

Viva France

Well you may well have the finally say by way of voting NON to the Euro Community within 2 years!
jonboy4969 19 May 2015

Why is it ok for the French

Why is it ok for the French to flout anti competition laws yet we always abide by it, that law was what ruled out financial assistance to MG Rover ten years ago...

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