Saturday, 27March 1999
PRESIDENT YOSHIKAZU HANAWA'S SPEECH AT THE JOINT PRESS CONFERENCE TO ANNOUNCE NISSAN-RENAULT ALLIANCE
I am Yoshikazu Hanawa, president of Nissan Motor Company.
Thank you very much for coming to our press conference, wh. We are very pleased to have so many journalists with us despite your busy schedules.ich marks a fresh start for Nissan and Renault
The alliance we are announcing today is a new type of corporate linkup not seen in the past, and we expect great benefits will be created out of it. With regard to specific benefits and synergies expected of this alliance, Mr. Louis Schweitzer, chairman and CEO of Renault, will speak about them after my remarks. First, I would like to give an overview of this alliance and speak about its significance and ramifications.
Today, we at Nissan and Renault signed a global alliance agreement, which includes equity participation. In addition, both companies and Nissan Diesel Motor Co., Ltd. concluded an agreement for Renault's capital participation in Nissan Diesel.
In accordance with these agreements, Renault will put up Y 643.0 billion, thereby gaining a 36.8 per cent equity stake in Nissan and a 22.5 per cent stake in Nissan Diesel. Along with these, we will transfer our sales financing companies in Europe to Renault. In this respect, Nissan will hold the right to acquire an equity interest in Renault in the future.
In terms of personnel, Nissan will receive three Renault officers. Conversely, I will be appointed to the Renault board. The three executives will assume the title of COO, Executive Vice President for Product Planning and Strategy, and Managing Director and concurrently Deputy CFO to join Nissan's top management team.
Behind the formation of this alliance was each of our two companies' strong desire to "become a powerful global player in the world's automotive market in the future." In order to achieve this, Nissan needs to improve its profitability and strengthen its financial position by stepping up its effort to evolve and accelerate the implementation of the company's ongoing "Global Business Reform Plan." For Renault's part, it needs to move ahead with its plans to "expand business operations globally," breaking away from its main focus on Europe to date.
Amid these circumstances, we started talks last July. For several months we conducted joint studies to explore the possibilities of complementing each other and creating synergies by taking advantage of each other's strengths. As a result, we found that our two companies can cooperate extensively in terms of strategies for regions, products, and technology.
Specifically, our cooperation will include joint purchasing on a global level, using each other's production and sales networks, consolidation and joint development of platforms and powertrains, and joint development of future advanced technologies.
Furthermore, by introducing Renault's highly reputed know-how and expertise in product concepts and cost cutting, we will be able to further strengthen our carefully selected core business areas where we have been concentrating our resources. Also, by having Renault complement the areas where we are shorthanded, we expect to evolve and accelerate the implementation of the "Global Business Reform Plan."
Meanwhile, Renault will push ahead with plans to globalize its business operations while drawing on Nissan's high levels of development and manufacturing technologies and of quality.
We intend to promote a host of these collaborative ventures, not through a mere merger or business tie-up, but through a new approach to a corporate alliance. This means that while each of our two different companies will maintain its own identity and have its own corporate strategies, we will cooperate with each other as "global partners with a strategic link that have strong but different brands and that are capable of competing well in the global marketplace in the 21st century."
This approach can be compared to the EU where major European countries have formed a union while maintaining their independence and increasing their individual national presence in the world arena.
Frank and sincere communications and steadfast efforts in many different business areas are essential if each of our companies is to gain the benefits of the alliance to the maximum extent possible. To that end, we will exchange top-level executives. Furthermore, we will form equity relations. In this respect, although capital participation is unfortunately one-sided at the moment, we would like to achieve cross-shareholdings in each other's companies at the earliest date possible.
We have established the "Global Alliance Committee" as a decision-making organizational structure to promote complementation of business activities and create synergies. This committee consists of the top executives of each company. "Cross-company teams" will be established under this committee by project and subject matter so that working-level people from both companies can study, draw up, and decide specific plans.
Each of our companies will incorporate the plans developed by the cross-company teams in the strategies that each company carries out individually and will compete in the global marketplace.
Under this cross-border corporate alliance, people, goods and capital will be exchanged. A true partnership should be born through the belief of each company in its new partner's strengths and will to achieve success. In this respect, it is important for each company to rise to the challenges and goals of this alliance with unwavering determination, and to eagerly learn from the strengths of the partner company.
For that purpose, with the aim of becoming world-class motor manufacturers always in mind, all of us, from top management on down to each individual employee, need to change our mindsets and behavior.
Given the ever-intensifying competitive environment, we do not have much time left. We know that problems confronting our two companies will not naturally work themselves out through this alliance. The point is that the extent to which we are able to evolve and accelerate the implementation of the strategies of each of our companies will depend on how well we can exploit the benefits of this alliance. I believe that only after accomplishing this will we be able to ensure a brighter future for both companies.
Our two companies have seized a great opportunity today. All we have to do now is successfully carry forward this alliance.
I would like to conclude my remarks by asking for your understanding and support while you look forward to Nissan's and Renault's progress in the days ahead.
Thank you.
