By on May 23, 2018

Carlos Ghosn

As Renault and Nissan discuss ways to strengthen their bond, Carlos Ghosn is asking everyone to slow their roll on the prospect of a merger. Despite continuously nudging the alliance in that direction, the CEO and chairman is often hesitant to discuss unification as anything more than a hypothetical. So this is par for the course.

“I don’t think you’re going to see it this year or next,” Ghosn said on Wednesday. “Lots of mergers collapse and destroy value — the strength of any company is the ability to motivate people, and how how are you going to do that if some of these people consider themselves second-class citizens.”

The second-class citizens he’s referencing are, presumably, Nissan employees seeking more influence within the Renault-Nissan-Mitsubishi Alliance. A large part of the group’s current strategy is to find ways to give the Japanese automaker more of a say in product development and operations.

As the more profitable automaker, Nissan feels it’s entitled to make decisions. But Renault currently has a 43.4 percent stake in Nissan, while Nissan only holds a 15 percent stake in Renault — effectively giving the French automaker corporate control.

Both Ghosn and Nissan’s CEO Hiroto Saikawa seem bent on creating a lasting relationship between their companies before their retirement, but they also seem keenly aware that the road ahead of them is fraught with peril — leaving both of them cautious when discussing a merger. However, Ghosn said he hoped to have see important decisions made that would strengthen the alliance by the end of this year.

“I don’t think there is a resistance,” Ghosn told Bloomberg in an interview. “Let’s try and find something that will reassure the stakeholders that this will continue, but at the same time maintain identity.”

He also issued a reminder that decisions take time to produce results within the industry, be it product or corporate developments. “You know our cycle, in terms of technology and product, is very long,” Ghosn said. “So what you are doing today is something that’s going to be visible three or four years down the road.”

He went on to stress that electric cars are regulator driven, which makes their future prospects a little easier to track. But automakers have to perpetually work with governments to help them understand the advanced technologies they’re requesting (but might not be particularly familiar with).

Getting back to the alliance, Ghosn noted that Nissan and Renault will experience a conversion, but stopped short of calling it full-blown merger. “We have already decided to have a common engineering, we have decided to have a common manufacturing, we have common purchasing,” he said. “This move toward more integration, toward doing more things in common, but still maintaining different brands [and] different identities you will continue to see.”

However, he’s worried about the sustainability of that model after the automakers’ current leadership retires. The top boss said a merger is one option for solving that problem, but not the only one. Ghosn explained that the ideal solution, for him, involves a drive for synergies to solidify the collaboration while allowing each brand to maintain its unique identity.

“At the end of the day, you need people who are proud of their brand going and fighting in all the markets,” he said. “But, at the same time, you don’t want duplication. You develop one technology, one platform, we buy together. Everything that the consumer doesn’t really care for should be done in common for the sake of efficiency and for the sake of [the price of our cars].”

[Image: Nissan]

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