NEWSLETTER
After weeks of speculation, on December 23, the Japanese automotive giants Nissan (NSANY) And Honda (HMC) He announced that they signed a memorandum that describes their plans for a possible fusion.
According to the proposed agreement, the two Japanese automobile manufacturers would merge into a common matrix company in August 2026. During a press conference, the CEO of Honda, Toshihiro Mibe, said that the merger needed to adapt to the new competition in an industry world automotive more difficult.
“The emergence of Chinese car manufacturers and new players has changed the automobile industry,” said Mibe. “We have the potential to be a world -class leading company in new mobility. By 2030, we need artillery to compete on the battlefield. So, we are starting today. “
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Before the announcement, Nissan was about to lose everything. In comments to the Financial Times the previous month, Nissan executives said the car manufacturer exists in the time borrowed, and points out that he has “12 to 14 months” to survive if the circumstances do not improve.
The CEO of Honda, Toshihiro Mibe, made it clear that the fusion “was not a rescue of Nissan”, and added that Nissan's ability to be profitable alone was a “prerequisite” before the merger could occur.
However, he recently suggests that Honda could have taken things too far in his effort to reach an agreement with Nissan, since a provocative movement received some rejection from Nissan executives.
The agreement is over, says Nissan, Honda
According to a report from Automotive newsThe planning behind the historic fusion of Nissan-Honda has officially ended.
At a press conference on February 13, the CEO of Honda, Toshihiro Mibe, acknowledged that his company's proposal to buy Nissan and operate it as one of Honda's subsidiary companies was too ambitious and risky.
“We anticipate that our proposal for actions of actions would be a fairly difficult decision for Nissan, and we consider that the possibility of the agreement withdraw,” said Mibe.
“However, much greater concern could be that integration would progress so slowly that we would fall into a more serious situation in the future.”
At a separate press conference later on the same day, the CEO of Nissan, Makoto Uchida, acknowledged that the Nissan Board of Directors did not see the value of becoming what would essentially be owned by the majority per Honda, since it would not assume the case of a “stronger” company.
“We were not sure that our autonomy would be kept or that Nissan's potential would really be maximized,” said Uchida. “I had doubts if it would be successful.
Related: The bold movement of Honda could have killed the fusion with its greatest rival
Nissan, Honda will work together, will simply not merge.
In a statement, Honda and Nissan said that Honda proposed to move away from the terms of the original memorandum of understanding signed on December 23 of last year.
“Honda proposed to change the structure of establishing a joint holder company, where Honda would appoint the majority of directors and the executive director based on a joint transfer of actions as initially described in the MOU, to a structure where Honda would be the company matrix and nissan the subsidiary through an exchange of actions, “they said.
“As a result of these discussions, both companies concluded that to prioritize the speed of decision -making and the execution of management measures in an increasingly volatile market environment that is directed to the era of electrification, it would be more appropriate cease discussions. “
In a separate joint statement, Nissan, Honda and Mitsubishi said they will continue working as strategic partners in the future electric vehicle technology.
“We will continue to focus on exploring strategic associations that aim to create a new value,” Uchida said during a press conference.
Related: Nissan American factory workers are being forced to a hard reality
Nissan of tense cash liquidity
With the fusion of Honda behind him, Uchida is still leading a Nissan who is still in trouble.
The end of fusion conversations occurs when Nissan reported a 78% drop in operational profits and a net loss in its last fiscal quarter. The car manufacturer is trying to control problems, including swollen inventory, sales sales and continuous cash burn.
In the third fiscal quarter of Nissan, which ended on December 31, its operational gain sank $ 899.2 million in the same period of the year before only $ 197.5 million. In addition, its net profit sank from a gain of $ 184.8 million the year prior to a loss of $ 89.5 million in its last fiscal quarter.
To return to the surface from consecutive loss rooms, Uchida
Nissan announced that it aims to save $ 2.59 billion during fiscal year 2026. He added that he plans to close three of its factories in the next two years and reduce thousands of jobs, including US factor workers.
The car manufacturer estimates that reducing some of its fixed costs will result in a saving of $ 1.94 billion.
It will cut around 2,500 jobs in its world sales and administration roles. In addition, in the course of two years, it will consolidate the production lines in Smyrna and Canton in the USA. And will close its operations in Thailand, which will reduce a total of 6,500 jobs.
Nissan points out that additional savings of $ 650 million will come from rationalizing other inefficiencies, such as shortening the development time of their new cars, rationalizing their alignments and products of products, and cutting weak links in their supply chain.
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Foxconn's question
With Honda outside, Uchida said Nissan “will carry out a strategic review to actively explore new associations.”
Taiwanese electronics giant Foxconn (FXCOF) It is a potential partner who has expressed interest in working with Nissan. In an earlier report, Apple's contract manufacturer (AAPL) IPhones has sent one of its main executives to speak with Bigwigs in the car manufacturer.
In a report by The Financial Times, the president of Foxconn, Young Liu, said he will consider acquiring Renault's participation in Nissan whenever it is a previous requirement to work with any of the automobile manufacturers.
“We talked about the acquisition of a participation in (Nissan),” said Liu. “Yes (taking a stake) is necessary for cooperation, we will consider it, but buying shares is not our main objective. Our main objective is cooperation.”
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