Carlos Ghosn, the man who led Nissan through nearly two decades of productive partnership with Renault before the alliance spectacularly imploded, says the success of a new three-way partnership between Nissan, Mitsubishi and Honda will be easier said than done.
The proposed all-Japan partnership, announced at an Aug. 1 news conference in Tokyo, would bring the companies together to work on electric and software-defined vehicles and joint procurement.
Nissan Motor Co. and Honda Motor Co. have begun to outline details of the idea, which dates back to a preliminary agreement in March, saying they would first jointly research an automotive software operating system next year and aim to deploy the next-generation system after 2027.
“Signing an alliance is the easy part. Now, making the alliance work is a completely different story,” Ghosn told Automotive News on Aug. 5 from Lebanon, where he is living as a fugitive from Japanese authorities after jumping bail in December 2019 and fleeing the country hidden in a box.
Indeed, many details of the Nissan-Honda deal, including financing and investment, are up in the air. Meanwhile, adding Mitsubishi to the mix brings another voice that could complicate the discussions.
Ghosn, who led the Renault-Nissan-Mitsubishi alliance as its chairman until his arrest at a Tokyo airport in November 2018, said the new partners faced major challenges. The relationship, he added, looked more like a fledgling acquisition by Honda than a true collaboration between equals.
That’s partly because Honda is by far the strongest of the three, Ghosn said.
Nissan saw rising U.S. stimulus nearly wipe out its profit in the April-June quarter as it struggled to sustain global sales volume growth. The company reported a 4.1 percent increase in global sales to 3.4 million in the fiscal year ended March 31.
Since rebalancing its alliance with Renault last year to gain independence, Nissan has looked like a company “trying to find a savior,” Ghosn said. “Signing a deal with Honda looks like a move to divert attention from the miserable results.”
Honda reports its fiscal first-quarter earnings on Aug. 7.
Japan’s second-largest automaker, unlike Nissan, reported record operating profit for the fiscal year ended March 31, with global sales rising 11 percent to 4.1 million vehicles.
“I can’t imagine for a moment how it’s going to work between Honda and Nissan, unless it’s an acquisition, unless it’s a disguised acquisition by Honda of Nissan and Mitsubishi with Honda in the driver’s seat,” Ghosn said. “It’s going to be an acquisition, a disguised acquisition.”
Nissan and Honda have not discussed cross-equity stakes with each other, Nissan CEO Makoto Uchida and Honda CEO Toshihiro Mibe said at their joint news conference.
But Mibe added that he does not rule out this possibility.
The partners are considering many options, perhaps even creating a new company, the Honda chief added. Honda has taken that approach by establishing a separate EV venture with electronics and technology giant Sony.
Ghosn was sent by Renault to Japan in 1999 to lead Nissan back from the brink of bankruptcy. His early success in turning around the troubled Japanese industrial icon earned him praise as a managerial miracle worker. He was soon tasked with leading both the French and Japanese automakers, becoming the first person to simultaneously lead two Fortune 500 companies.
In 2016, he orchestrated Nissan’s purchase of a controlling 34% stake in Mitsubishi Motors Corp., solidifying the grand alliance’s position as the world’s largest auto group.
Looking back, Ghosn said successful partnerships are a holistic balancing act.
“Saying they will work together is only 5 percent of the challenge. The other 95 percent of the areas are where you really need to sit down, have a strong position and have a division of labor,” Ghosn said. “You need to work on synergies. You need to make sure you are not fixated on your national identity or belonging. You need to really look at your bottom line, increase your revenues, cut your costs.”
The new alliance taking shape may struggle to deliver on its full potential, given Honda’s history of determined independence, Ghosn said. Honda has never been in a significant equity deal with another automaker, although it has had loose ties with General Motors.
During his time at Nissan, Ghosn said the company never considered partnering with Honda.
Ghosn’s era at Renault-Nissan-Mitsubishi came to an end with his arrest and eventual indictment in Japan on four counts of financial misconduct.
The former Nissan executive, who denies any wrongdoing, says the allegations against him were fabricated to block a fuller integration of Nissan with Renault.
Ghosn has been hiding in his ancestral homeland of Lebanon since fleeing Japan in a dramatic escape under cover of night, packed in a box aboard a chartered jet. Japan has issued an Interpol red notice for his arrest. But Ghosn has a Lebanese passport, and Lebanon does not extradite its citizens.
Ghosn said he now spends his time teaching at a local college and fielding proposals from startups seeking business advice. He continues to fight multiple legal cases around the world, including in Japan, where prosecutors are still seeking criminal charges and Nissan has filed a ¥15.5 billion ($105.8 million) civil complaint. Meanwhile, Ghosn has filed his own civil complaint in a Lebanese court against Nissan, seeking $1 billion in damages and lost compensation.
“I have my lawyers. They are playing with this,” Ghosn said.
“I’ve turned the page. I’m having my own life here. I’m a 70-year-old man. I’ve had a very busy life, so I’m trying to take some time for myself as well.”