Nissan and Honda may have officially signed a memorandum of understanding (MoU) to explore a merger, but former Nissan chief Carlos Ghosn isn’t so optimistic about the deal, telling Bloomberg in an interview that “it’s a desperate move. It’s not a pragmatic deal because frankly, the synergies between the two companies are difficult to find.”
He goes on to say that “there is practically no complementarity” between the two companies, that Honda was “not very excited” about the move and suggested that Japan’s influential economy, trade and industry ministry (METI) was the deal’s main driver, attempting to “marry the short-term problems of Nissan with the long-term vision of Honda. They (METI) pushed Honda into the deal, without any doubt.”
Although Ghosn acknowledged potential benefits in cost-sharing, particularly in purchasing and technology investment, he said that it would be concentrated in Japan, reiterating the similarities between Nissan and Honda’s markets and products. He also foresees the two companies clashing over engineering solutions.
“I remember when we took control of Mitsubishi, Mitsubishi was not afraid of the collaboration with Renault; they were afraid of the collaboration with Nissan, because they knew how tough it was going to be when engineers meet together and there is this pride of ‘my solution is the best,’ which always is an obstacle to develop serious synergy for the future,” he said.
Is it a geopolitical Japan-shoring-up-against-China thing? “Without any doubt,” Ghosn said, adding that it’s a “defensive mode” to “avoid a social cataclysm in Japan and to reinforce (Nissan and Honda) in foreign markets.”
Nissan and Honda aim to finalise the terms of the merger (including the share transfer plan) by June. Mitsubishi aims to decide by the end of next month whether to join to make it a threesome.
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