Renault CEO Ghosn: Macron’s victory ‘good news’

Ania Nussbaum and John Lippert
Bloomberg News

Carlos Ghosn, chief executive officer of French carmaker Renault SA, sees the embrace of globalization by France’s president-elect Emmanuel Macron as a harbinger of faster growth for the country’s economy.

“He’s been elected for many reasons. One of them is: Do you want to be part of the larger economy, or do you want to be more on a protectionist mode?” Ghosn said Monday in an interview in New York.

Ghosn spoke a day after independent candidate Macron was elected president of France, defeating anti-European Union politician Marine Le Pen. His large margin of victory helped make Ghosn and other chief executives more optimistic about Macron’s ability to carry out his promises and to open a new chapter in France’s economic development, he said in the interview.

“The fact that he’s somebody who believes in the global market, in the integration of Europe and the importance of Europe, it’s obviously very good news for all companies and for all enterprises,” said Ghosn, who is also chairman of Renault’s Japanese partners Nissan Motor Co. and Mitsubishi Motors Corp.

The ballot was critical for Renault amid questions about the French government’s 19.7 percent stake in the carmaker. Ghosn has said a state exit from Renault, which is based in the Paris suburb of Boulogne-Billancourt, could open the way for a change in the company’s cross-shareholding structure with Nissan, potentially enabling a deeper alliance. Nissan owns 15 percent of Renault, though doesn’t exercise voting rights, while the French company holds about a 44 percent of its Yokohama-based partner.

Ghosn said it’s too soon to know what specific steps Macron will take with the Renault shares and therefore too soon for him to comment.

Under Macron, France stands to be more inclined to sell some of its stake in Renault, Evercore ISI said in a note Monday, calling the implications of the vote “positive” for the carmaker.

A disposal by the state could be a catalyst for restructuring the carmakers’ partnership, while a full-fledged merger won’t take place as long as France is a Renault shareholder, Ghosn said in February.

The CEO has chafed at the state’s holding, which authorities boosted in 2015 to secure extra voting rights for long-term shareholders that Ghosn was seeking to quell. The head of the Renault-Nissan alliance only found out about the planned share increase in a late-night phone call from Macron just hours before it became public knowledge, people with knowledge of the matter said at the time.

The government’s move also raised concerns at Nissan that France might seek a role at the Japanese partner, though that dispute was defused when the state pledged not to interfere in the alliance’s governance. Even so, while officials originally portrayed the state’s purchase of the extra 4.7 percent stake as temporary, the holding hasn’t changed since.

Renault and Nissan established their tie-up in 1999, when Nissan was on the verge of bankruptcy. The Japanese carmaker has since become bigger and more profitable than Renault.

Tensions over France’s stake are lingering. In observations from a report by the country’s Court of Audits earlier this year, Renault argued the purchase of the additional stock was made “in an insider-dealing situation.”

Macron’s victory thwarts policy plans by Le Pen’s National Front to ditch the euro currency and restrict France’s international trade, which would have disrupted Ghosn’s globalization strategy, which also includes a controlling stake in Russian carmaker AvtoVAZ. While Macron, a former economy minister, has supported that strategy, he has also criticized Ghosn’s remuneration and threatened to come up with laws limiting executive pay.