The Renault capital tie-up and the Nissan Revival Plan (1999)

What foreign-capital discipline severed, and what it left

The core of this decision lies less in the financial rebuild itself than in cutting, with outside discipline, the “sanctuary” it could not touch on its own. The limits of the Tsuji Yoshifumi regime — which struck the symbolic blow of closing the Zama plant and still could not stop the losses — created the ground to invite in Renault’s capital and Ghosn as an executor from outside. Precisely because the ties at the core of Japanese-style management — plant, employment, keiretsu — were unbound all at once, the dramatic reversal of turning profitable in a single year became possible.

Even so, that drama was the flip side of a price. The purchasing-cost cuts that led the recovery came with the exit of subcontractors that had shared half a century with Nissan, like Yokoyama Kogyo, thinning a supply network that had leaned on the long-term trust of the keiretsu. On the capital side too, the Renault-led asymmetric relationship remained without being equalized, and the distortion of cross-shareholdings without voting rights led on to the later Ghosn arrest and the rethink of the relationship with Renault. The sanctuary-free rebuild saved Nissan, while it made the company re-examine, over a long time, the weight of what it had let go in order to be saved.