Renault, Nissan reboot auto alliance for post-Ghosn era

Category : Business

Unlocking Word Meanings

Read the following words/expressions found in today’s article.

  1. rocky / ˈrɒk i / (adj.) – difficult and not likely to become successful

    Their rocky relationship led to a breakup.

  2. turnaround / ˈtɜrn əˌraʊnd / (n.) – a sudden change from a bad situation to a good one

    We’ve seen a great turnaround in the economy under the president’s leadership.

  3. daring / ˈdɛər ɪŋ / (adj.) – brave and taking risks

    The daring interview with the politician talked about the scandals he was involved in.

  4. uneven / ʌnˈi vən / (adj.) – not equal

    Waiters complained about the uneven distribution of tips.

  5. stumble / ˈstʌm bəl / (v.) – to experience a problem while trying to achieve success

    The team almost won, but they stumbled in the final round.


Read the text below.

Automakers Renault and Nissan formalized their reboot of a relationship that had grown rocky, culminating in the spectacular fall of top executive Carlos Ghosn, who had led successful turnarounds at both companies before his arrest and daring escape.

The boards of both companies approved equalizing the stake each automaker holds in the other to 15%, bringing a better balance in the French-Japanese alliance, which also includes smaller Japanese carmaker Mitsubishi Motors Corp. The uneven shareholdings had been viewed at times as a source of conflict.

Until now, Renault Group of France owned 43.4% of Nissan Motor Co., while the Japanese automaker owned 15% of Renault.

“We have been waiting a long time for this moment,” Renault board Chairman Jean-Dominique Senard said at a news conference in London, calling it a “new era.”

The long-speculated changes to the carmaker alliance were announced in January. Shares equivalent to a 28.4% stake will be transferred to a French trust, according to the companies.

Renault, whose top shareholder is the French government, and Nissan agreed on an orderly sale of that stake, although there will be no deadline.

Nissan Chief Executive Makoto Uchida vowed to take the alliance to “the next level of transformation” to adapt to a new era.

“This is not a choice but a need,” he said.

In theory, partnerships are a good way for automakers to cut costs by sharing parts, production and technology, especially when the industry is going through such dramatic change with EVs.

That also means that, once formed, ending an alliance can be difficult because the companies’ development, manufacturing and products get so closely tied together.

Still, partnerships can stumble because of the different corporate cultures of the automakers, especially when it involves a meeting of the West and East.

This article was provided by The Associated Press.

Viewpoint Discussion

Enjoy a discussion with your tutor.

Discussion A

  • Ending an alliance can be difficult when the partnering companies have become so closely tied together. In your opinion, when should partnering companies decide to end their partnership? Discuss.
  • What do you think companies should consider when entering an alliance with another company (ex. company policies, shareholdings)? Discuss.

Discussion B

  • What do you think are the pros and cons of business partnerships between eastern and western companies? Discuss.
  • If you were a business owner, which company would you like to partner with? Why? Discuss.
Category : Business