AUTONEWS

Former Nissan CEO Carlos Ghosn criticizes Nissan-Honda alliance

Nissan and Honda sent shockwaves through the automotive world when news of a potential merger broke on Tuesday. Nothing is official yet, but that’s not stopping former Nissan CEO Carlos Ghosn from sharing his thoughts on the potential deal. In a recent interview with Bloomberg, the former CEO was extremely critical of the Nissan-Honda alliance and the reasons behind it.

“In my opinion, it’s a desperate move,” Ghosn told Bloomberg. “It’s not a pragmatic deal because, frankly, the synergies between the two companies are hard to find. There’s virtually no complementary [characteristics] between the two companies. They’re in the same markets. They have the same products. The brands are very, very similar.”

Furthermore, Ghosn is confident that the proposed merger is not a one-size-fits-all between the two Japanese brands. He believes that Japan’s Ministry of Economy, Trade and Industry (METI) is pushing the deal to strengthen the Japanese economy, and that Honda is unhappy about it.

“Having lived in Japan for many years, I understand how METI can be influential,” Ghosn explained. “In my opinion, there is no industrial logic to it, but there comes a time when you have to choose between performance and control. Obviously, if you can have both, it’s better. But there are times when you have to choose, and without a doubt, with METI and everything I know about them, they prefer control over performance. So without a doubt, they forced Honda to do the deal.”

Ghosn made a daring, Hollywood-style escape from Japan several years ago, where he was under house arrest awaiting trial on numerous charges of alleged financial crimes during his time at Nissan. He led the company for 16 years and was arguably its most successful CEO. Given how his relationship with Nissan ended, it’s probably no surprise that he criticized the company in his conversation with Bloomberg.

“You can measure the team by the results they get, that’s the only way to know if someone is capable of doing something,” he said. “Frankly, when you look at the last five years [at Nissan], the results are not a good testament to the strengths of the team.”

Neither Nissan nor Honda have said anything about a potential merger at this point, but the brands have been collaborating for a few months. A memorandum of understanding was signed in August to explore future projects. But a merger would go far beyond sharing ideas. If completed, it would make the conglomerate one of the largest auto companies in the world. But according to Ghosn, it would be no easy task. "You have to understand that Honda is an engineering organization, it's very strong in engineering. And Nissan takes great pride in its own engineering. So the battle here is trying to decide which technologies will be adopted by the new company - if it's a merger - or by the new alliance. I can tell you it's going to be very difficult."

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