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This is not a good merger but the best that can happen. Once again Nissan is facing bankruptcy. Last time Renault bailed them out and put Ghosn in charge. Nissan cut the old managers, cut costs, dropped their vertical integrated supply chain, closed factories and laid off excess workers. That brought Nissan back to profitability and growth. All was well for a bit but once Nissan was doing well again Japanese pride got in the way and they grew to resent being run by foreigners.
This came to a head when Renault renewed Ghosn’s CEO contract with the express directive to turn the Nissan / Renault partnership into a irreversible merger under a common holding company with Renault in charge. That was a bridge to far and the Japanese government arrested Ghosn and another US executive on trumped up charges. Ghosn famously escaped in a musical equipment case and now lives the good life on the lamb.
Nissan went back to being Nissan and now they are back to where they were before Renault rode in to the rescue. The problem is they have cut off all chance of foreign investment with the circus around Ghosn. It was made very clear that the Japanese government will not allow a foreign company to buy a major Japanese automaker. So that leaves Toyota and Honda. Toyota is already tied up with Diahatsu, Subaru, and Mazda and they don’t need more volume. There is no upside for them.
So that leaves Honda. Honda is doing well but at only 4 million vehicles per year are too small to survive the next decade alone. The problem is that Nissan is a poor fit for a merger. Nissan and Honda’s primary markets and product lines overlap. All this merger does is add volume. While they are putting on a happy face and saying this is an equal partnership the common company will be run by a board primarily made up of Honda executives and run buy a Honda Chairman and CEO
A Honda / GM merger would be ideal but simply will not be allowed.
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