February 12, 2018 / 2:53 PM / a year ago

France backs Renault COO nomination, seeks Nissan integration

PARIS (Reuters) - The French government said on Monday it will back Renault (RENA.PA) boss Carlos Ghosn’s nominee for chief operating officer but wants an agreement to transform the Renault-Nissan alliance into an “integrated” automotive group.

Carlos Ghosn, Chairman and CEO of the Renault-Nissan Alliance (L) and Groupe Renault chief competitive officer Thierry Bollore (R) attend a news conference to unveil Renault next mid-term strategic plan in Paris, France, October 6, 2017. REUTERS/Charles Platiau

The French state, Renault’s biggest shareholder, sees Chief Performance Officer Thierry Bollore’s promotion to second-in-command “in a positive light”, a finance ministry source told Reuters. But support for Ghosn’s own contract renewal may hinge on plans for a deeper tie-up with partner Nissan (7201.T).

The ministry statement follows the surprise resignations of senior Renault director Thierry Desmarest and executive Stefan Mueller, days before a Feb. 15 board meeting at which Bollore’s appointment is expected to be discussed.

The departures came amid concerns raised by other independent board members about the recruitment process that led to the nomination of Bollore, a loyal Ghosn lieutenant, and the elimination of other internal and external candidates including Mueller, Reuters and Les Echos have reported.

Ghosn, 63, “appears to have chosen Monsieur Bollore”, the finance ministry source said. “That is perfectly acceptable to the French state shareholder.”

However, he added: “If we were to realise later that there was a problem, we would still have time to change our approach.” Ghosn’s four-year Renault board mandate is up for renewal at the next shareholder meeting in June.

Renault and the government have sought to avoid a repeat of a bitter 2015 clash in which France raised its stake to swing a shareholder vote and secure double voting rights.

The government had also pushed in vain for a full Renault-Nissan merger on terms that would safeguard French industrial interests - and is now reviving demands that Ghosn develop a “road map” to a combined group for submission to shareholders.

Renault currently holds 43.4 percent of Nissan (7201.T), which in turn controls Mitsubishi Motors (7211.T) via a 34 percent stake. Ghosn chairs all three companies.

The carmakers need to be “better integrated” in order for their alliance to survive his eventual succession, the finance ministry source said on Monday.

“We need to prepare the future of the alliance,” he said, adding that its current structure remains too “heavily dependent on Carlos Ghosn as a person”.

Reporting by Laurence Frost and Gilles GuillaumeEditing by Sudip Kar-Gupta

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