Having just sealed the three-way tie-up between Renault, Nissan, and Daimler, Carlos Ghosn already lusts for more. At a press conference in Brussels, Ghosn said the alliance is open to new partners to get in bed with. Muses The Nikkei [sub]: “He may envision a grand coalition of Japanese, European and U.S. automakers.”
Last time the industry was beset by the urge to merge about a decade ago, Renault and Daimler both made advances to the Nipponese Nissan bride. Nissan was a damsel in distress and needed a chivalrous knight. Renault won Nissan’s heart. Dejected Daimler merged with Chrysler. And we know how that worked out.
The Nikkei goes down memory lane:
“The Daimler-Chrysler merger was touted as the deal of the century, while the Renault-Nissan partnership was derided as an alliance of the weak. But the German-American combination ended in disaster, proving the difficulty of melding two huge companies with different cultures.
Meanwhile, Renault and Nissan have built up a mutually profitable partnership through such steps as sharing components and jointly developing electric vehicles. It is estimated that the companies have created well over 1 trillion yen in synergy from their partnership over the past 11 years. It is this success that has been driving Ghosn’s quest to find a new partner.”
It’s not easy to be a car maker these days. Carmageddon has destroyed huge and formerly profitable swaths of the automotive landscape. Banks puke when they hear “auto maker.” At the same time, huge investments have to be made into emerging growth markets and green technologies.
According to Ghosn, a car maker is condemned to assured death if the company sells less than 2 million vehicles a year. The more, the merrier. Industry observers agree: The huge investments have to be spread across as much volume as possible. That’s why Ghosn is looking for more partners to join the club.
As many of us are painfully aware, monogamous relationships are hard enough to keep alive. Additional partners bring additional conflicts and jealousy. Nissan managers already felt slighted when Ghosn spent too much time courting Dr. Z.
Says The Nikkei [sub]: “Nissan’s senior executives other than Ghosn were left out in the cold during the alliance talks. Even when news media started reporting on the deal in the making in mid-March, most senior Japanese executives at Nissan were unaware of the negotiations. They had to say they had heard nothing about the proposal.” Also, “many Nissan employees fear that depending on another company for key engine technology could erode their company’s technological prowess.”
Here is a thought: Maybe Ghosn should hire James Sikes as a consultant. He’s the expert when it comes to Japanese car companies, such as Toyota, and he’s the sultan of swing.
