Nissan\u00a0will be the victim of cost-cutting \u201ccarnage\u201d if it combines forces with Japanese peer\u00a0Honda, former Nissan CEO Carlos Ghosn told CNBC on Tuesday.<\/p>\n
\u201cI think, without any doubt, Honda is going to be in the driver\u2019s seat, which is very sad to see after having led Nissan for 19 years [and]\u00a0<\/strong>brought Nissan to the forefront of the industry, to see that they\u2019re going to be the victim of a carnage, because there is total duplication between Nissan and Honda,\u201d he told CNBC\u2019s \u201cSquawk Box Europe.\u201d<\/p>\n Ghosn, who once led three automakers as part of the Nissan-Renault-Mitsubishi alliance, has been residing in Lebanon after being\u00a0arrested in Japan in November 2018\u00a0and fleeing trial on charges of financial crimes. He denies misconduct.<\/p>\n \u201cThere is practically no complementarity here, which means, if they want to make synergy it is going to be through maybe cost reduction, duplication of plan, duplication of technology, and we know exactly who\u2019s going to pay the price of it. It\u2019s going to be the minor partner, and it\u2019s going to be Nissan,\u201d Ghosn said.<\/p>\n Nissan had greater complementarities with France\u2019s\u00a0Renault, Ghosn estimated, referencing a\u00a0long-standing partnership that has been largely unwound.<\/p>\n Speculation about a potential Honda and Nissan merger began earlier this month, and the two companies\u00a0confirmed the official start of talks over a business integration\u00a0during a news conference on Monday. Under current proposals, a holding company would act as the parent of both firms and be listed on the Tokyo Stock Exchange, with Honda \u2014 which has a market capitalization around four times that of Nissan \u2014 nominating most board members of the new entity. Nissan\u2019s strategic partner\u00a0Mitsubishi\u00a0is also engaged in talks over joining the group.<\/p>\n A $54 billion Nissan-Honda group would leapfrog South Korea\u2019s\u00a0Hyundai\u00a0to become the world\u2019s third-largest automaker by vehicle sales, behind Japan\u2019s\u00a0Toyota\u00a0and Germany\u2019s\u00a0Volkswagen. The integrated group would also represent a landmark in automotive industry consolidation, which has been long expected in both Japan and worldwide as businesses struggle to shoulder the development costs of electric vehicles and autonomous driving technology.<\/p>\n Executives at both Honda and Nissan\u00a0on Monday stressed\u00a0that a combined company would be able to share the intelligence and resources necessary to compete in the EV transition and deliver economies of scale, boosting operating profit to a projected 3 trillion yen ($19.1 billion) in the long term.<\/p>\n Nissan is embarking on the ambitious merger while simultaneously undertaking a deep\u00a0<\/strong>restructure\u00a0it announced in November, which will reduce global production capacity by a fifth and cut 9,000 jobs.<\/p>\n Honda CEO\u00a0Toshihiro Mibe on Monday acknowledged that some shareholders may feel his company would be supporting\u00a0struggling Nissan\u00a0as part of the deal, but stressed that the business integration talks will \u201cnot come to fruition\u201d if the two automakers fail to stand on their own.<\/p>\n Ghosn nevertheless told CNBC that the merger plan suggests \u201cNissan is in panic mode, looking for somebody to save them from the situation, because they are unable to generate the solution by themselves.\u201d<\/p>\n He expressed \u201chigh doubts\u201d that the turnaround at Nissan will be successful, without providing details.<\/p>\n Kei Okamura, senior vice president and portfolio manager at Neuberger Berman, echoed the sentiment that details of the merger plan still need to be ironed out.<\/p>\n \u201cIf you\u2019re an investor you\u2019re going to be thinking about the three to five earnings outlook. What was announced [Monday] was the near term, so the timeline, and the long-term vision. The only issue is how is this merged entity going to get there, and that\u2019s where there are a lot of uncertainties ahead,\u201d Okamura told CNBC\u2019s \u201cStreet Signs Asia\u201d on Tuesday.<\/p>\n \u201cThe post-merger integration is going to be absolutely essential \u2026 unless these companies are able to really full integrate themselves together in terms of the people, the assets and of course the culture, these deals have the potential to unwind, and we have to take into consideration that this deal may not happen if [Nissan] doesn\u2019t come through with its turnaround program,\u201d Okamura added.<\/p>\n Nissan declined to comment on this story beyond\u00a0its statement\u00a0out on Monday. Honda did not immediately respond to a CNBC request for comment.<\/p>\n<\/p>\n Nissan\u00a0will be the victim of cost-cutting \u201ccarnage\u201d if it combines forces with Japanese peer\u00a0Honda, former Nissan CEO Carlos Ghosn told CNBC on Tuesday. \u201cI think, without any doubt, Honda is going to be in the driver\u2019s seat, which is very sad to see after having led Nissan for 19 years [and]\u00a0brought Nissan to the forefront […]<\/p>\n","protected":false},"author":0,"featured_media":13485,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-13484","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/13484","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=13484"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/13484\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/13485"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=13484"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=13484"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=13484"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}