Macron, Renault and the Future of French Capitalism

Presidential candidate’s approach to governance at the car maker revealed his ‘dirigiste’ touch

By Stephen Wilmot

Renault Chief Executive Carlos Ghosn, left, and France’s then Economy Minister Emmanuel Macron pictured together in September 2014. Photo: Agence France-Presse/Getty Images


French presidential favorite Emmanuel Macron has pitched himself as a political outsider intent on modernizing the economy. But his record of intervention at the country’s biggest car maker should be a gut check on exactly how far he would go to reform the French state’s role in private enterprise.

For much of 2015, Renault was engaged in a public battle with Mr. Macron, then economy minister to socialist President François Hollande. The tensions centered on the government’s shareholding, which Mr. Macron raised to almost 20%, from the 15% level agreed in a 2002 alliance with Nissan , NSANY 0.37%▲ Renault’s Japanese peer and other major shareholder.

The move came amid union and media worries that Renault was being “Nissanized.” Also at play: Mr. Macron bought the extra stock to stop Renault from getting around a law he supported giving longer-term shareholders in France double voting rights. Renault boss Carlos Ghosn thought the law would destabilize the Nissan alliance, particularly since Nissan renounced its voting rights as part of the 2002 cross-shareholding deal.

The two men announced a truce in December 2015, but tensions have resurfaced. In a submission to a January report by the Court of Auditors, which supervises French state activities, Renault said public interventions “weakened the company more than they strengthened it.” Mr. Ghosn told analysts in February that “as long as the French state remains a shareholder” Renault cannot move closer toward a formal merger with Nissan, despite ever-tighter operational links and calls for industry consolidation.

Mr. Macron was acting under Mr. Hollande’s authority in 2015. He might behave differently as boss of his own centrist party, En Marche, which he set up after quitting the cabinet last year.

The party’s manifesto includes a commitment to sell down minority state shareholdings to fund a €10 billion ($10.9 billion) investment fund focused on “the industry of the future.”

But it seems unlikely Mr. Macron will undo his Renault shares purchases. He raised the government’s stake at what turned out to be a peak. Reducing it now would expose him to accusations of mismanaging public money. A recent Court of Auditors report noted the woeful investment performance of the government’s €77 billion portfolio of listed assets: State-backed stocks fell 29% from 2010 through 2016, compared with a gain of 28% for the French stock-market index.

Analysts at Exane BNP Paribas recently identified seven companies whose government stakes might be trimmed. Renault didn’t feature. Its smaller French rival Peugeot , whose shares have doubled since a 2014 state bailout and is now taking over General Motors ’ European business, did.

Mr. Ghosn has a personal interest in seeing off the French state: It keeps voting against his pay.

Last year it cobbled together with other investors a slim majority against his remuneration package. Renault ignored the unbinding vote, prompting enough outrage for a new law that makes the vote binding.

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