Leaders League. In 1999 you orchestrated
the tie up between Renault and Nissan.
Why did you choose this particular Ja-
panese company?
Louis Schweitzer. Part of the reason why we
were able to close this deal was the difficult
financial situation Nissan were in at the time.
Renault were well established in Europe,
but suffered from a lack of presence on the
international scene in two key markets, Asia
and the US. Given the means at our dispo-
sal, we would not have been able to penetrate
these markets on our own. And as a direct
partnership with an American company was
impossible, I therefore sent a team to evaluate
the feasibility of a strategic partnership with
a Korean or Japanese manufacturer already
present in the US. Over time our search came
to focus on two Japanese companies, Mitsu-
bishi and Nissan. Of the two, Nissan had the
advantage of being better positioned in the
American market. They were already in dis-
cussions with Ford and Daimler, but in the
end these companies abandoned their plans
to partner Nissan, judging the deal too risky.
Renault became the only candidate and a deal
was struck in the two weeks that followed.Leaders League. Why did you choose a
strategic partnership rather than a merger
or an acquisition?
L. S. For a number of reasons. We wouldn’t
have had the resources to buy a company the
size of Nissan, which isn’t a candidate for this
type of deal anyway. There were also organiza-
tional obstacles. From my experience, notably
on the Volvo deal, a successful merger requires
a great deal of proximity between the two com-
panies. With Nissan it was, to my mind, essen-
tial to put together a framework where both
partners could work effectively together while
preserving their own personality and a measure
of autonomy. Take the merger of Daimler and
Chrysler: it has been a failure because the new
company has not succeeded in uniting all their
staff under the one banner. A significant nu-
mber of them still identify, first and foremost,
with their firm of origin. Even fusions between
French companies are fraught with difficulties.The Peugeot and Citroën merger took decades
to become fully effective. With a Japanese auto
company whose head office is 10,000 kilome-
ters from France, not to mention the different
language and culture, a merger would have
been doomed to failure.Leaders League. To what do you attribute
the success of this strategic partnership?
L. S. The partnership is a success because
the two firms coexist. Staff in each company
therefore take care of their respective com-
pany’s interests. In a merger, one party is of-
ten sacrificed to fit the needs of the greater
whole, while with a strategic partnership this
never happens. You don’t progress unless
both companies win. In this scenario ques-
tions of loyalty to a company are fundamen-
tal and serve the interests of the partnership.
With a merger, on the contrary, company
loyalty often works against the deal.Leaders League. The two car makers are
still cross-owned today, with Renault
having 43.4% of Nissan and the latter
owning a 15% stake in the French com-
pany, but without voting rights. Given
the current strong economic position of
Nissan, shouldn’t the particulars of this
partnership be re-examined?
L. S. The answer is no! What you need to keep
in mind is that at the time the deal was
concluded Nissan were a much bigger com-
pany than Renault, and were present in markets
more profitable than those of Europe. The fact
that Nissan had for some months a stock mar-
ket value below that of Renault was only due to
managerial and other contextual difficulties.
What’s more, the fact that Nissan don’t have vo-
ting rights is only because of French legislation
on treasury shares. In the initial agreement it
was stipulated that Nissan would become a
shareholder in Renault so that they would have
an interest in the success of the French firm.
Although Nissan don’t have voting rights, they
have two members on the board of Renault. In
practice, therefore, there is some reciprocity at
directorial level, as further evidenced by the
presence of a common board of management.Created in 1999, the Renault-Nissan alliance is the world’s No. 4 carmaker and the
longest-running transnational partnership between two major manufacturers in the
automotive industry. Louis Schweitzer, former Chairman of Renault and the man who
orchestrated this historical alliance, breaks his silence and firmly asserts there’s no need
to change the agreement between the two car giants.IN A MERGER,
ONE PARTY IS OFTEN
SACRIFICED TO FIT
THE NEEDS OF THE
GREATER WHOLE,
WITH A STRATEGIC
PARTNERSHIP THIS
NEVER HAPPENS
“In a strategic partnership you don’t
progress unless both companies win”
LOUIS SCHWEITZER
General Commissioner for
Investment and former Chairman,
RENAULT
EXPRESS BIO
A graduate of the École nationale
d’administration, Louis Schweitzer was Chief
of Staff to Prime Minister Laurent Fabius
between 1984 and 1986. He joined Renault
in 1986 and became Chairman of the French
auto giant in 1992. As head of Renault, he
established a strategic partnership with
Japanese car manufacturer Nissan which
continues to bear fruit.