Tuesday, February 19, 2019


The WALL STREET JOURNAL has reported a previously unknown element in Nissan’s desperate bid to stop a fully-fledged merger with Renault.

Months BEFORE the clumsy arrest and prosecution of Carlos Ghosn, Nissan executives asked the Japanese Government to step in and help avoid the merger.

Instead, the powerful Ministry of Economy, Trade and Industry (METI) proposed that it would draft an agreement to oversee the merger talks. That was definitely not what Nissan wanted, and considered METI inserting itself into the talks as aggressive. Nissan subsequently telling METI it would handle the matters by itself.

Nissan has two huge problems with a merger. First, by volume, Nissan has become the bigger of the partners; but, more importantly it has a huge cash pile, which it does not want Renault to be able to access – to help lift its falling sales in France and Europe.

When its subversive moves to get its government to help stop the merger failed, Nissan moved on to Plan B – which was to get rid of the main driver of the merger – Carlos Ghosn. We all know how that worked out.

You may wonder why Ghosn is still in jail? The issue is that Nissan’s lawyers apparently recognize that the charges on which he is being held are flimsy, and in some cases not substantiated by any hard evidence, and they and Nissan’s Board are hoping Renault will blink first.

Keeping Ghosn locked up frustrates Renault’s ongoing business activities, causes a chasm in relations between the two parties, which hopefully (from Nissan’s viewpoint) will eventually lead Renault to stop its merger talks.

The sad part about this whole affair from a technical stance, is that Nissan also desperately needs the fruits of the Alliance, such as projects like the Renault-developed Common Family Module (CFM), on which many new models in the Renault-Nissan lineup are supposed to built on.

It also needs the future plans Ghosn was working on to bring Mitsubishi into the Alliance in such a way as to clearly divide responsibilities for vehicle types (Cars/SUVs/Trucks), and efficiently combine skills, abilities and engineering, to ensure profitable synergies.

Nissan may be the stronger of the two partners and may have a huge cash pile, but its Board and senior management are totally devoid of the skills of someone like Ghosn, to lead them from committing another potential act of corporate suicide by going it alone – which is where Ghosn came in, in the first place, to save Nissan from itself.

Nissan likes to see itself to be as important to Japan as its rival Toyota, but Eiji Toyoda’s company is strong in things that matter, like stable, transparent corporate governance, sound model planning and progression, and the general conduct of the company in all of its many global markets.

By comparison, Toyota’s passenger cars remain top sellers in most of their global markets, backed up by a strong presence in the SUV and truck market, along with advanced technological developments in Hybrid, Electric and Fuel cell powertrains.

On the other hand, Nissan’s passenger car sales have taken a dive; it has a sprawling un-connected range of trucks and SUVs (some on platforms which should have been retired years ago); and very poor plans to cope with advancing technology, and autonomous vehicles.

It was Ghosn who drove the joint venture with Daimler AG, which saw the introduction of the Infiniti Q30 and Q30X; and the Mercedes-Benz X-range of trucks, based on the Nissan Navara.

The contrast between Ghosn’s vision and energy to execute projects, and Nissan’s rear-view mirror management style could not be greater.

The phrase, “Cutting off your nose to spite your face” springs to mind. For the millennial’s reading this, here’s an explanation of this phrase from Wikipedia:

"Cutting off the nose to spite the face" is an expression to describe a needlessly self-destructive over-reaction to a problem: "Don't cut off your nose to spite your face" is a warning against acting out of pique, or against pursuing revenge in a way that would damage oneself more than the object of one's anger.

I think that sums of the current state of Nissan’s thinking. And, whilst the Nissan Board is fart-assing around pursuing its fate, it’s NOT planning for its future, or maybe I should say, waiting until it drops over the edge of the cliff to start thinking about any possibilities of a last-minute rescue.

For the record, it's worth noting Nissan's numbers from its July 2018 Board Meeting. This data shows Nissan's status in real time, and its not happy reading for shareholders....

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