Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
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.Squawk Europe Box“.
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 accused of 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 for that. 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 been dismantled.
Speculation about a possible Honda and Nissan merger began earlier this month, with the two companies confirmed 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 of both companies and be listed on the Tokyo Stock Exchange, and Honda (which has a market capitalization about four times that of Nissan) would nominate the majority of the members of the board. board of directors of the new entity. Nissan’s strategic partner mitsubishi He 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 long-awaited consolidation of the auto industry both in Japan and around the world as companies struggle to shoulder the costs of developing electric vehicles and autonomous driving technology. .
Honda and Nissan executives stressed 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 a projected 3 trillion yen ($19.1 billion) in the long term .
Nissan is embarking on this ambitious merger and, at the same time, undertaking a deep restructure announced in November that it will reduce global production capacity by a fifth and eliminate 9,000 jobs.
Honda Chief Executive Toshihiro Mibe acknowledged Monday that some shareholders may feel his company would support them. Nissan fighting as part of the deal, but stressed that business integration talks “will not come to fruition” if the two automakers fail to 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 earnings outlook. What was announced (Monday) was the short term, that is, the long-term schedule and 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.Asia Street Signs” 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.
