British jobs at risk after French interference in Nissan-Renault alliance

The recent changes in the stakeholding of the partnership between Nissan and Renault has given rise to concerns that more than 6,000 jobs at the Sunderland plant in the UK may move to France, at the behest of the French government. In addition to increasing its stake in the French carmaker, Economy Minister Emmanuel Macron also introduced laws that provide more powers to long-term investors in the company.

These moves have not only increased France's stake in Renault to 19.7% but will allow Paris to control more than 30% of the voting rights in Renault from April. The French government is now Renault's largest shareholder and this could hurt the jobs market in the UK as Macron, a former Rothschild banker, could use his government's decision-making power to protect and generate more jobs in France.

Insiders at Nissan fear that the 6,000 plus jobs at its Sunderland plant could be moved to France. It was recently reported that Nissan was poised to start manufacturing its Inifiniti series at its Sunderland plant, a move that would add hundreds of jobs. The Sunderland plant is believed to have fought off competing claims from other factories in Europe and France.

Nissan, which currently has no voting rights, had a board meeting earlier this week to discuss the growing French influence on its operations. It has also been negotiating with the French government for months and hopes the situation would be resolved at Renault's board meeting scheduled for 11 December.

Some of the proposals that Nissan is pitching for includes:

• asking the French government to reduce its stake;
• asking France to provide written guarantees that it will not get involved in operational decisions; and
• converting its 15% stake into voting rights to enable it to have more say in the decision making process.

The options available to Nissan to reduce the French government's influence include buying more shares in Renault or issuing additional shares to dilute the French carmaker's holding. However, Nissan believes these options would be unfavourable to its existing shareholders.

If the issue is not resolved, it might lead to a restructuring of the alliance. Renault owns 43.4% of Nissan since the alliance was formed in 1999. Nissan is now significantly bigger than Renault than it was when the alliance was formed.