It’s unclear whether or not Cherie Blair attended yesterday’s (30 April) Renault AGM in Paris at which the French State formalised its extraordinary shareholding move , but maybe the wife of the former British Prime Minister would have raised a quizzical eyebrow following her somewhat bizarre elevation to the executive floor of the automaker.
Tony Blair famously espoused the somewhat fuzzy ‘third way’, echoing those other political titans, Bill Clinton and Gerhard Schroeder as a compromise between traditional left and right values, but Cherie’s astounding move to be elected to the board of Renault, with an astonishing 99% approval vote, comes hard on the heels of some good old-fashioned State intervention at the same meeting.
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Briefly, the automaker has been locking horns with the French State in a bid to overturn Paris’ wish to impose its ‘Loi Florange’ on Renault and allow double voting, a move enthusiastically welcomed by unions as a means of anchoring the manufacturer firmly on French soil.
Through the manoeuvring of its Agence des Participations de l’État (APE), Paris signalled its intent to up its stake in Renault from 15% to nearly 20%, a move that had to be approved at the AGM, at whose meeting Renault put forward its famous ‘Resolution 12,’ urging ‘one share, one vote.’
But, presumably in Renault’s eyes artificially, that resolution was soundly defeated and Paris’ tentacles have become yet more tightly wound around the automaker, much to the barely concealed delight of unions, anxious to preserve the company as essentially French with a Statist flavour at the top to boot.
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Renault has been hardly hiding its irritation at the move for the past few weeks, with its Board urging CEO, Carlos Ghosn to ensure the ‘balance’ be maintained between itself and Alliance partner, Nissan, while equally demanding the State revert to its 15% stake either at the next AGM or shortly afterwards.
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By GlobalDataThe extent of that annoyance was couched in language resigning the producer to a fait accompli: “The temporary purchase by the State of 4.5% more capital in Renault in the perspective of the General Assembly, strongly reduces the probability of adopting resolution number 12; but that does not change the deep analysis made by the very large majority of the Board,” noted the automaker.
But following the State-sponsored coup in Paris, which has seen the APE up its stake in Renault from 15.01% to 19.74% to hold 58.4m shares, Renault finally bared its teeth and came out fighting at what it must perceive as undue interference in its own business.
“If the State wasn’t a shareholder, the resolution [12] would have been adopted with more than 92% – the State had 32.6% of the votes today considering the quorum,” Renault tells me from Paris – its bitterness barely concealed behind the diplomatic niceties.
And in a rearguard move, Renault is also calling up its battalions in the Far East, marshalling the power of Nissan to bolster its cause
“During today’s meeting of Nissan, the Board reviewed in detail the events of the last few weeks and unanimously decided to support the decisions made by the Board of directors of Renault at its meeting of April 16,” Renault emailed me from Paris, but it’s unclear whether the Japanese could dispose of their share in order for the French to hoover them up, a move which could destabilise the very nature of the alliance.
This is more than theoretical accountancy however. France’s decision to move on Renault reveals a deep-seated desire by Paris to underline its Statist credentials, to fly the flag for its unashamedly left-of-centre policies for which, in fairness, it had a reasonable mandate not so long ago at the ballot box.
There’s no attempt to hide that position either. In language which would have the Third Wayers choking on their bacon and eggs, waffles and bratwurst, the French Ministries of Economics and Finance proudly trumpet their Renault move is “perfectly in line with the new doctrine of the State as shareholder.”
They then reinforce the message just to make sure no-one’s in any doubt where their philosophical weight is bearing down: “It [doctrine] has as a goal reinforcing the weight of the State shareholder in managing the business with the intention of protecting its long term interests…and particularly of those of Renault employee shareholders,” note both Ministries in a carefully choreographed joint statement.
Well, that’s music indeed to Renault’s powerful labour bodies who have gleefully tucked into the “new doctrine” – eerily reminiscent of language from the Soviet Union – with the CFE-CGC body noting the State move enabled it to: “Guarantee its influence in the running of our group and thus ensure Renault is anchored in France.”
Even further to the left, Renault’s unique CGT union echoes the State’s wish to ‘anchor’ Renault domestically, never mind the company’s current global mindset: “The work of employees is at the heart of industrial success – that’s what the CGT wants to make known to shareholders,” it thunders.
“In the long term, it’s Renault’s existence as a French business, designing and producing in France, which is in question. Renault could otherwise not be the goose that lays the golden egg.”
Today (1May) just happens to be Labour Day in France, where traditionally, massed ranks of unions mass in fraternal comradeship to proclaim workers’ rights and publicly show their political allegiances; the two are rarely separate across the English Channel.
Cherie Blair, newly crowned Renault Board Director, is unlikely to be marching shoulder to shoulder with les syndicats, whose unconcealed approval of State involvement would make her Labour husband blanche with discomfort.
But the State’s move is only the first salvo in this undoubtedly attritional confrontation, whose further machinations are yet to play out.
This is possibly the greatest challenge Ghosn has faced since the so -called spy scandal at Renault a few years ago and one which appears to directly set Paris four-square against his authority.
Will he take the fight much, much further than the initial sparing so far, enlisting the influence of his far flung Alliance or will the combined ranks of still-powerful unions and a French government resolutely set on the ‘new doctrine’ have its ideological way?
This may be only the first of such skirmishes where Paris intervenes to build its power in iconic brands and the famously French-speaking Tony Blair may well be now having a word with his newly empowered wife to lend his considerable negotiating skills to the armoury of Carlos Ghosn.
