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FCA-Renault merger faces tall odds delivering on cost-cutting promises

FRANKFURT/DETROIT — Fiat Chrysler Automobiles and Renault promise huge savings from a mega-merger, but such combinations face tall odds because of the industry's long product cycles and problems translating deal blueprints into real world success, industry veterans told Reuters. BMW's 1994 purchase of Rover, and Daimler's 1998 merger with Chrysler both made sense on paper. The companies promised to hike profits by combining vehicle platforms and engine families. Both combinations proved unworkable in reality, and were unwound. Renault and Nissan, which have been in an alliance since 1999 designed to share vehicle components, have only managed to use common vehicle platforms in 35% of Nissan's products despite an original target of 70%, according to Morgan Stanley. FCA and Renault have raised the stakes for themselves by ruling out plant closures. That increases the pressure to achieve more than $5 billion in promised annual savings from pooling procurement and research investments. The two companies have yet to fill in many of the blanks in the merger plan put forward by Fiat Chrysler. Renault's board is expected to act soon to accept the proposal, but that would lead only to a memorandum of understanding to pursue detailed operational and financial plans. A final deal and the legal combination of the two companies could take months to complete if all goes well. Pressure to cut automotive pollution is driving the latest round of consolidation. Automakers are looking at multibillion-dollar bills to develop electric and hybrid cars and cleaner internal combustion engines. Fiat Chrysler and Renault are betting they can design common electric vehicle systems, then sell more of them through their respective brands and dealer networks, cutting the cost per car. Developing all-new electric vehicles can bring more opportunities to share costs from the outset, industry experts said. "With the emergence of connected, autonomous, electric and shared vehicles, carmakers face immediate investments, so new opportunities for sharing costs have emerged," said Elmar Kades, managing director at Alix Partners. However, most electric vehicles lose money. This is a challenge for city car brands in Europe in particular. Both Renault and Fiat rely heavily on this segment for sales.

Lebanon may lift Ghosn's travel ban if files not received within 40 days

BEIRUT — Lebanon may lift a travel ban on ousted Nissan boss Carlos Ghosn if files pertaining to his case do not arrive from Japan within 40 days, caretaker justice minister Albert Serhan said in a statement on Friday. Ghosn fled Japan to Lebanon, his childhood home, last month as he awaited trial on charges of under-reporting earnings, breach of trust and misappropriation of company funds, all of which he denies. His dramatic escape has raised tensions between Japan and Lebanon, where Ghosn slammed the Japanese justice system at a two-hour news conference on Wednesday, prompting Japan's Justice Minister to launch a rare and forceful public response. Lebanon has no extradition agreement with Japan. Serhan said in the statement that he had met with the Japanese ambassador to Lebanon and reaffirmed the importance of the relationship between the two countries. He also said that Ghosn's wife Carole will also be questioned by Lebanese prosecutors when authorities receive an Interpol notice for her. "Carole will be subject to the same procedures that were followed for (Carlos) when the red notice was received from Interpol." Tokyo prosecutors on Tuesday issued an arrest warrant for Carole for alleged perjury related to the misappropriation charge against her husband. A spokeswoman for Carole said that she had voluntarily returned to Japan nine months ago to answer prosecutors' questions and was free to go without any charges, adding that the warrant was "pathetic". A fair trial? Carlos GhosnÂ’s lawyer on Friday told JapanÂ’s government that the authorities had failed to arrange for a fair trial that respected universal rights. Francois Zimeray, French lawyer for Ghosn, said that it had been for JapanÂ’s prosecutors to prove GhosnÂ’s guilt, not for Ghosn to prove his innocence. “It belongs to the prosecution to prove guilt and not to the accused person to prove its innocence,” Zimeray said in a statement. Japanese Justice Minister Masako Mori launched a rare and forceful public takedown of auto executive-turned-fugitive Ghosn after he blasted the countryÂ’s legal system as allowing him “zero chance” of a fair trial as he sought to justify his escape to Beirut. Reporting by Hoda Monem, Dominique Vidalon and Richard Lough. Related Video: This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings. Government/Legal Nissan Renault Carlos Ghosn

Feds say Americans' bid to avoid extradition in Ghosn escape is 'flawed'

BOSTON — U.S. prosecutors on Tuesday said a former Green Beret and his son, wanted by Japan for helping former Nissan boss Carlos Ghosn flee the country, were advancing a "flawed" interpretation of Japanese law to fight their extradition. Michael Taylor and his son, Peter Taylor, were arrested in Massachusetts last month at Japan's request for allegedly smuggling Ghosn out of the country on Dec. 29, 2019, in a box while he was out on bail awaiting trial on financial charges. Ghosn fled to Lebanon, his childhood home, after being charged with engaging in financial wrongdoing, including by understating his compensation in Nissan's financial statements. He denies wrongdoing. Lawyers for the Taylors in a motion last week asked a federal judge in Boston to quash the provisional warrants issued in May for their arrests, arguing that "bail jumping" is not a crime in Japan. Defense lawyers argued that helping someone jump bail was also not a crime. While Japan issued arrest warrants for the Taylors in January, the lawyers said the crime stated in the warrants is an immigration offense and a non-extraditable misdemeanor. But U.S. prosecutors in a brief filed on Tuesday said it would be "unprecedented" for the extradition case at this junction to be tossed based on a "flawed interpretation of Japanese law and a mischaracterization of the facts." While Japan has not yet formally sought their extradition, the country has confirmed that Taylors' conduct constitutes a felony, U.S. prosecutors said. "The purported loophole through which the Taylors seek to evade justice simply does not exist," U.S. prosecutors wrote. Prosecutors added that neither Taylor, including Michael, a U.S. Army Special Forces veteran and private security specialist, should be released from jail as they are flight risks. Abbe Lowell, the Taylors' lawyer, said he was reviewing the filing. Related Video: Government/Legal Mitsubishi Nissan Renault Carlos Ghosn