Jim Woods

The Renault-Nissan-Mitsubishi Alliance forged by recently imprisoned leader Carlos Ghosn has helped all three companies and should survive to offer investing opportunities amid likely activism by the governments of France and Japan where the manufacturers are headquartered.

Much value already has been achieved by the Renault-Nissan-Mitsubishi Alliance for cost savings, as well as shared parts and suppliers, among other advantages, but the three companies still could enhance shareholder value despite the arrest of one the auto industry’s most visionary executives. Ghosn’s confinement since Nov. 19 in an austere Japanese prison while authorities consider charging him with underreporting his income by estimated $44 million over five years understandably could worry investors, but representatives of the Renault-Nissan-Mitsubishi Alliance may calm matters when they are scheduled to meet in Amsterdam on Nov. 29.

France-based Renault SA (OTC:RNSDF; RNO.FP) may have benefitted the most from the alliance due to its 43 percent ownership of bigger and more profitable Nissan Motor Co. (NSANY). Renault also is the only one of the three so far not to replace Ghosn as its chairman. However, Renault’s relative strength in the alliance may be waning with Nissan now selling one third more cars annually than its partner.

Nonetheless, Renault’s stake in Nissan nearly triples the latter company’s 15 percent share of its France-based alliance member. Renault, on the other hand, does not have an equity stake in Mitsubishi. However, the French government owns 15 percent of Renault and could be a factor in determining the company’s future course.

To read the rest of Paul’s weekly investment column, please  click here. 

Paul Dykewicz, www.pauldykewicz.com, is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, the Journal of Commerce,Seeking Alpha, GuruFocus and other publications and websites. Paul is the editor of StockInvestor.com and DividendInvestor.com, a writer for both websites and a columnist. He further is the editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul previously served as business editor of Baltimore’s Daily Record newspaper. Paul also is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz.