The Trader Harbor
  • Business
  • Politics
  • World News
  • Stocks
  • Business
  • Politics
  • World News
  • Stocks

The Trader Harbor

World News

Nissan could face cost-cutting ‘carnage’ in Honda merger, Carlos Ghosn says

by admin December 25, 2024
December 25, 2024
Nissan could face cost-cutting ‘carnage’ in Honda merger, Carlos Ghosn says

Nissan will be the victim of cost-cutting “carnage” if it combines forces with Japanese peer Honda, former Nissan CEO Carlos Ghosn told CNBC on Tuesday.

“I think, without any doubt, Honda is going to be in the driver’s seat, which is very sad to see after having led Nissan for 19 years [and] brought Nissan to the forefront of the industry, to see that they’re going to be the victim of a carnage, because there is total duplication between Nissan and Honda,” he told CNBC’s “Squawk Box Europe.”

Ghosn, who once led three automakers as part of the Nissan-Renault-Mitsubishi alliance, has been residing in Lebanon after being arrested in Japan in November 2018 and fleeing trial on charges of financial crimes. He denies misconduct.

“There 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’s going to pay the price of it. It’s going to be the minor partner, and it’s going to be Nissan,” Ghosn said.

Nissan had greater complementarities with France’s Renault, Ghosn estimated, referencing a long-standing partnership that has been largely unwound.

Speculation about a potential Honda and Nissan merger began earlier this month, and the two companies confirmed the official start of talks over a business integration during 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 — which has a market capitalization around four times that of Nissan — nominating most board members of the new entity. Nissan’s strategic partner Mitsubishi is also engaged in talks over joining the group.

A $54 billion Nissan-Honda group would leapfrog South Korea’s Hyundai to become the world’s third-largest automaker by vehicle sales, behind Japan’s Toyota and Germany’s Volkswagen. 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.

Executives at both Honda and Nissan on Monday stressed that 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.

Nissan is embarking on the ambitious merger while simultaneously undertaking a deep restructure it announced in November, which will reduce global production capacity by a fifth and cut 9,000 jobs.

Honda CEO Toshihiro Mibe on Monday acknowledged that some shareholders may feel his company would be supporting struggling Nissan as part of the deal, but stressed that the business integration talks will “not come to fruition” if the two automakers fail to stand on their own.

Ghosn nevertheless told CNBC that the merger plan suggests “Nissan is in panic mode, looking for somebody to save them from the situation, because they are unable to generate the solution by themselves.”

He expressed “high doubts” that the turnaround at Nissan will be successful, without providing details.

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.

“If you’re an investor you’re 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’s where there are a lot of uncertainties ahead,” Okamura told CNBC’s “Street Signs Asia” on Tuesday.

“The post-merger integration is going to be absolutely essential … 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’t come through with its turnaround program,” Okamura added.

Nissan declined to comment on this story beyond its statement out on Monday. Honda did not immediately respond to a CNBC request for comment.

This post appeared first on NBC NEWS

0
FacebookTwitterGoogle +Pinterest
previous post
MUST SEE Options Trade Ideas! DIS, AAPL, META, BA, LULU
next post
IRS plans to pay 1 million taxpayers up to $1,400. Here’s how to check if you’re eligible.

Related Posts

Wayfair to open its first large store, as...

May 18, 2024

Retailers scramble to move billions in cargo as...

October 1, 2024

Redbox set to close as DVD market withers...

July 13, 2024

Boeing machinists reject new labor contract, extending strike

October 25, 2024

Top liquor distributor favored Costco and Kroger over...

December 14, 2024

Dick’s Sporting Goods to buy struggling Foot Locker...

May 16, 2025

The new class war: A wealth gap between...

April 30, 2024

Richard Parsons, former Time Warner CEO, dies at...

December 28, 2024

Dow tumbles 475 points, S&P 500 suffers worst...

April 17, 2024

Sony and Apollo send letter expressing interest in...

May 4, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest

    • The Real Drivers of This Market: AI, Semis & Robotics

      July 21, 2025
    • What Musk’s fracture with Trump means for GOP’s future: ‘Beating heart of the Republican Party’

      July 21, 2025
    • Trump’s housing chief rips Powell for blowing millions on Fed facelift during housing crisis he perpetuates

      July 21, 2025
    • Trump celebrates 6 months back in office: US ‘totally revived’ after being ‘DEAD’ under Biden

      July 21, 2025
    • Biden admin spent hefty sum of US tax dollars to upgrade embassy swimming pools in Iraq, Russia

      July 21, 2025
    • Trump heads to Scotland, continues ironing out trade deals after notching six months back in office

      July 21, 2025

    Categories

    • Business (1,299)
    • Politics (4,040)
    • Stocks (1,535)
    • Uncategorized (45)
    • World News (1,292)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: TheTraderHarbor, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 thetraderharbor.com | All Rights Reserved