Negotiation efforts between Nissan Motor Co. and Honda Motor Co. to merge under a joint holding structure have officially collapsed, leaving both companies reassessing their strategies for the future. According to journalist 久男 井上, recent meetings revealed Nissan’s commitment to pursue independent recovery.
Nissan gathered its executive team on February 3 to announce its intention for "self-reconstruction" and communicated this decision to Honda. This meeting indicated clearly which direction Nissan intended to take, signaling difficulties moving forward with talks of integration.
On February 5, both Nissan and Honda held separate board meetings to discuss the future of their potential partnership. The outcome was noteworthy; by the afternoon, Nissan's board agreed to withdraw from the memorandum of negotiation established back on December 23, 2022, which initiated the talks for the merger.
Reportedly, Honda's President Toshiro Mibe stated, "There is no chance we’ll reach economic integration as planned." This reflects Honda's frustration arising from Nissan's reluctance to implement extensive structural changes required for a successful merger. The initial talks had marked the intention to form the joint holding company, but differences concerning management control surfaced almost immediately.
Initially, both companies announced their intention to explore economic integration. At the time, Mibe emphasized the need for more discussions before making any decisions about merging operations. This stems from Honda’s insistence on having significant input concerning management aspects of the potential joint company.
According to insiders, the priority for Honda was Nissan's commitment to restructuring. Honda urged Nissan to streamline its operations effectively, launching significant cuts to address past inefficiencies, particularly within its North American market where performance has faltered.
Notably, Nissan’s plans typically involved reducing its workforce by approximately 9,000 positions or 7% of its total employees. Meanwhile, industry analysts pointed out necessitating even heftier cuts, with estimates of reductions climbing to about 40,000 roles. This expectation mirrored the drastic measures under the revival plan laid out by the renowned former CEO, Carlos Ghosn, back during the late 1990s.
Concerns have been voiced within Honda about Nissan’s inadequate response rate to its restructuring strategies by their shared deadline of resolving the situation. Honda seemed increasingly wary of any joint venture where Nissan acted on its schedule, rather than harmonizing with Honda's pressing timeline.
With figures being discussed, Nissan’s production capacity had dwindled—down from 7.2 million vehicles globally to about 5 million—while the utilization rate dropped significantly to around 60%. This low turnover is uncharacteristic, as successful automakers typically maintain operational capacity exceeding 80% for profitability.
The breakdown of these negotiations raises several questions concerning the brands' individual futures. The partnership was increasingly perceived by Honda as inclined toward its management interests, causing friction we saw play out during these proximity talks.
Nonetheless, both parties acknowledge the possibility of future collaboration, particularly within the burgeoning sphere of electric vehicles (EVs) where both companies seek to innovate sustainably.
A spokesperson for Nissan hinted at keeping dialogue open, stating, "We will explore our relationship dynamics, primarily focusing on areas such as EV collaboration.” This indicates the companies might try to salvage mutual benefits even as they step back from merger negotiations.
While the negotiations ended, the question now revolves around how both Nissan and Honda will reinvent their operational blueprints. Concern over the automotive industry's shift toward EVs remains pivotal, including pressures for both companies to establish competent production lines befitting changing consumer demands.