The proposed merger between Honda and Nissan isn’t going quite as smoothly as planned. Both firms announced on Friday that they will only release details of their plans – originally slated to be revealed at the end of last month – in the middle of February.
According to Kyodo News, the carmakers said they were still discussing the finer points of the merger, having confirmed in a press conference last month they had agreed to begin talks of merging under a holding company in 2026. Both brands would continue to operate as usual within that same holding company, they added.
Honda CEO Toshihiro Mibe said then that his company hinged the merger on Nissan – in a financial crisis with only “12 or 14 months to survive,” said a senior official previously – making steady progress in restructuring its business. Sources close to the matter told the Japanese publication that Honda has been urging Nissan to strengthen its efforts.
To its credit, Nissan did announce in November that it planned to cut 9,000 jobs worldwide and reduce global production capacity by 20%, having seen its net profit fall by more than 90% from April to September. The sources also said it will offer early retirement programmes to employees at its three US plants and reduce its workforce in Thailand.
But Honda reportedly remains unsatisfied by the said progress and has called for more drastic measures to ensure a successful turnaround. Meanwhile, Nissan’s (and Renault’s) alliance partner Mitsubishi had also been in talks to join the merger but is now not keen on doing so, as its relatively small size would make it difficult for it to affect management decisions of the joint holding company.
The Three Diamonds company now hopes to explore a collaboration with the merged firms while maintaining its status as a listed company, with a final decision also expected in mid-February or later. The news only adds to the bumpy road Honda and Nissan have already faced – the former has pressured the latter to buy back Renault’s stake in the company, but Nissan’s dwindling resources means it may not be in the position to do so.
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