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nissan will be victim of cost-cutting “carnage” if it combines forces with Japanese peers slingformer Nissan CEO Carlos Ghosn told CNBC on Tuesday.
“I think, without a doubt, Honda will be in the driver’s seat, which is very sad to see after leading Nissan for 19 years (and) “It brought Nissan to the forefront of the industry, to see that they are going to be victims of carnage, because there is total duplication between Nissan and Honda,” he told CNBC’s “Squawk Box Europe.”
Ghosn, who once ran three automakers as part of the Nissan-Renault-Mitsubishi alliance, resides in Lebanon after being arrested in Japan in November 2018 and fleeing trial for financial crimes. He denies misconduct.
“There is virtually no complementarity here, which means that if they want to achieve synergy, it will be perhaps through cost reduction, duplication of plans, duplication of technology, and we know exactly who will pay the price. It will be the junior partner, and it will be Nissan,” Ghosn said.
Nissan had greater complementarities with the French company renaultGhosn estimated, referring to a long-standing partnership that has largely unraveled.
Speculation about a possible Honda-Nissan merger began earlier this month, with the two companies confirming the official start of talks on a business integration during a press conference on Monday. Under current proposals, a holding company would act as the parent company for both companies and be listed on the Tokyo Stock Exchange, and Honda (which has a market capitalization roughly four times that of Nissan) would nominate the majority of the board’s members. board of directors of the new entity. Nissan’s strategic partner Mitsubishi is also in talks to join the group.
A $54 billion Nissan-Honda group would surpass South Korea’s hyundai become the third largest automobile manufacturer in the world by vehicle sales, behind the Japanese toyota and from germany volkswagen. The integrated group would also represent a milestone in the consolidation of the auto industry, something long expected both in Japan and around the world as companies struggle to shoulder the costs of developing electric vehicles and driving technology. autonomous.
Honda Stock Set for Best Day in More Than 16 Years Thanks to Share Buyback Plan and Nissan Deal
Honda and Nissan executives emphasized Monday that a combined company could share the intelligence and resources needed to compete in the transition to electric vehicles and generate economies of scale, boosting operating profits to 3 trillion yen (19, 1 billion dollars) projected in the long term.
Nissan is embarking on this ambitious merger and, at the same time, undertaking a deep restructuring it announced in November, which will reduce global production capacity by a fifth and eliminate 9,000 jobs.
Honda CEO Toshihiro Mibe acknowledged Monday that some shareholders may feel his company would support struggling Nissan as part of the deal, but stressed that business integration talks “will not come to fruition” if the two automakers Cars cannot stand on their own.
However, Ghosn told CNBC that the merger plan suggests that “Nissan is in panic mode, looking for someone to bail them out of the situation, because they can’t come up with the solution themselves.”
He expressed “strong doubts” that Nissan’s turnaround will be successful, without giving details.
Kei Okamura, senior vice president and portfolio manager at Neuberger Berman, echoed the sentiment that the details of the merger plan still need to be ironed out.
“If you are an investor, you will be thinking about the three to five profit prospects. What was announced (on Monday) was the short term, that is, the schedule and the long-term vision. The only problem is how it is ” This merged entity is going to get there, and that’s where there are a lot of uncertainties ahead,” Okamura told CNBC’s “Street Signs Asia” on Tuesday.
“Post-merger integration will be absolutely essential…unless these companies are able to fully integrate in terms of people, assets and, of course, culture, these deals have the potential to fail, and we have to have “Keep in mind that this agreement may not be finalized if (Nissan) does not comply with its recovery program,” Okamura added.
Nissan declined to comment on this story further your statement comes out on monday. Honda did not immediately respond to a request for comment from CNBC.
