The talks of a potential merger between Honda and a floundering Nissan have encouraged Carlos Ghosn to chime in from his comfortable self-exile in Beirut. The former chairman and CEO at Nissan stated in TV interviews that the potential deal is “a desperate move.” Ghosn is familiar with desperate moves — it’s been five years since he fled Japan in a Yamaha music case to escape prosecution on corruption charges.
Nissan is attempting to stop what could be a catastrophic decline. The automaker’s quarterly operating profit plunged 99 percent earlier this year. Things aren’t perfect for Honda either. The company’s plans to collaborate with General Motors to create small, affordable electric vehicles collapsed in October. Honda’s motivation for the agreement was to cut costs. Ghosn told Bloomberg that Honda is being pushed into the merger with Nissan by Japan’s Ministry of Economy, Trade and Industry. He added:
“They’re trying to figure out something that could marry the short-term problems of Nissan and the long-term vision of Honda,” Ghosn said. While there is “no industrial logic” to a deal, “there is a moment where you have to choose between performance and control.”
Ghosn went into more detail on his predictions in an interview with Asia Times. He doesn’t believe that any deal between Honda and Nissan would be a merger of equal. Honda would be taking control of Nissan. With his obvious bias, he also claimed that Nissan’s current management has no idea what they’re doing. Ghosn said:
“What I believe is that there could be a takeover. The Japanese government might decide that it can’t let Nissan collapse. But as you know, a takeover is not an alliance. It’s just a takeover, which also means that the company taking control is going to do it its own way and get rid of what it doesn’t need. That may happen.”
“Also, remember that Honda is fiercely independent and has never been able to establish an alliance. They’ve bragged over the years that they’re the little guy going alone against Toyota.”
Only time will tell how the merger talks play out and if Foxconn will step in to buy Nissan itself. Ghosn will likely still be in Beirut when this all shakes out as he continues to fight a legal battle to hold on to his assets. He was ordered to hand over a 121-foot yacht to Nissan along with $32 million in September.
