Renault boss to bid for new mandate

29th April 2010, Comments 0 comments

Renault chief Carlos Ghosn on Friday will seek another mandate to steer the French car maker through difficult economic times.

Ghosn, who also heads Japanese auto manufacturer Nissan, was appointed to Renault's board of directors in 2002. In 2005, he took charge of Renault operations and was last year named president of the group.

He is expected to ask Renault shareholders on Friday to extend his mandate on the board of directors for another four years, after which the newly elected board would re-appoint him president and chief executive.

Ghosn, born in Brazil to a Lebanese family, arrived at Renault after acquiring a reputation as a "cost killer" at Nissan, which he revived from rapid decline.

He is likely to draw on these skills again to cope with increasingly tough conditions for car makers, as car bonus schemes begin to be withdrawn across Europe -- its biggest market -- during the course of this year.

Government stimulus schemes have been propping up sales of the group, including in the first quarter when revenues jumped 28.4 percent to 9.072 billion euros (12 billion dollars).

That boon is likely to fade in the second quarter.

The group said Tuesday that it expected "the economic environment to remain difficult in 2010 with a European market that could decline by 10 percent on the total industry volume of 2009."

Hard hit by the crisis, Renault posted a net loss of 3.1 billion euros in 2009, due mainly to its share in companies linked to Nissan and Swedish heavy vehicle manufacturer Volvo.

As a result, the group will not be issuing dividends to shareholders for the second consecutive year.

Renault shares have slumped to just a fifth of their value in 2008, even if the company is performing better than during the peak of the world economic crisis in 2009.

Shareholders meeting on Friday are also expected to raise issues surrounding Renault and Nissan's recent announcement of an alliance with German car maker Daimler.

The participants project that the strategic cooperation would generate combined savings of four billion euros (5.34 billion dollars) over the first five years of their cooperation.

They would also share existing engines, while jointly developing technology for new electrical versions.

Shareholders of Daimler have raised doubts about the alliance, warning that it could tarnish the image of the brand.

Two state representatives are also set to be elected to the board at the annual meeting, following strong opposition from the government to the manufacturer's plans to shift the production of its small car Clio to Turkey.

Ghosn was summoned to the Elysee over the move.

The French state is Renault's biggest shareholder, with a 15-percent stake.

© 2010 AFP

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