The greatest superpower available to any mortal human might be the ability to overcome one’s insecurities. With enough confidence, you’ve got a decent chance of accomplishing a few things. Nissan is a company seemingly defined by its own insecurities — a business with no faith, only fear, and we all know that fear is the mind-killer.
Another Dune reference in The Morning Dump? Yes. If you’d like a Frank Herbert-free car news roundup you can write your own blog, with blackjack and hookers. I have to start the day with the big news from Asia that Nissan is bungling the Honda merger before it even got started.
Nissan isn’t alone! A key measure of Germany’s car industry found that most businesses think they’re uncompetitive. That’s nicht gut, but there are reasons for hope. Toyota reported a 28% drop in quarterly operating profit, mostly due to production woes. The future still looks bright for Toyota and, especially, its luxury arm Lexus.
Nissan Wanted To Be Treated As An Equal, But It Is Not An Equal
William Gorham is a footnote in Nissan’s history. If you go to the company’s English language heritage site you’ll find one reference to him from 1919:
William R. Gorham, an American engineer, developed a three-wheeled vehicle in 1919. This drew attention from a businessman in Osaka, who established Jitsuyo Jidosha Co., Ltd.. The mechanical equipment, auto parts, and materials were ordered and imported from the United States.
Jitsuyo Jidosha Co. was a modern automobile factory of the time.
That’s not much to go on, and you’d assume it was a weird little quirk in the company’s history. The funny American engineer who came to Japan to build airplanes and created a little three-wheeler. Other sources paint a slightly broader picture, with Gorham being responsible for bringing the production know-how from America to Japan. That little three-wheeler eventually became a four-wheeled car that helped establish what would become Datsun and, eventually, Nissan.
Here’s another reference from Choong Kim’s “Japanese Industry in the American South” via a small history of Gorham:
[I]f the Japanese [people] had been too ingrown to learn from William R. Gorham, the American electrical engineer who is considered the founder of the Datsun (Nissan) motor company in terms of technology, Nissan might not be the success we see today.
Journalist David Halberstam in his book The Reckoning, about the car industry, takes it further, writing that “[t]he earliest teachers at Nissan had been Americans, most particularly an exceptional man named William R. Gorham. In terms of technology, Gorham was the founder of the Nissan Motor Company.”
That is an American viewpoint, and many, many things had to happen in order to create Nissan. I don’t want to diminish the key contributions of people like Yoshisuke Aikawa or Masujiro Hashimoto. I do think it’s a bit of a tell that Nissan makes this offhanded reference to the role of Gorham and seems to leave it at that.
Nissan has had good years and bad years, like any company, but it’s been a company more defined by its bad ones. The ultimate bad period came with the bursting of Japan’s asset bubble in the late ’90s. The company was creating some amazing cars and, yet, it was in terrible financial shape. Nissan had to get bailed out by Renault and, worse, had to accept a bad deal that put too much of the control of the company in French hands.
The company was, according to a lot of reporting, always worried about submitting to Renault. As a CEO, Carlos Ghosn restored some of Nissan’s pride, and the company, for a while, seemed to be going in the right direction. However, depending on who you believe, Japanese Nissan execs feared that Ghosn was going to move to bring Nissan fully under Renault.
Ghosn was arrested, famously, and Nissan eventually got its separation from Renault. Unfortunately, without Renault, Nissan is yet again in a bad way and a target for a takeover. It was concern that Foxconn could buy Renault’s remaining stake in Nissan that allegedly caused the Japanese government to strongly suggest to both Honda and Nissan that the two companies consider merging.
I have thought this was a good idea for a while, mostly because it would create one big automaker instead of three smaller ones (if you include Mitsubishi). The catch, as always, is that Nissan is overestimating its bargaining position. This came to a head recently and, according to Nikkei Asia, Nissan is likely going to walk away from a merger. Why? The most obvious sticking point is that Nissan is supposed to restructure itself and, thus far, has been conservative in its restructuring.
But there’s more:
The valuation of the two sides was also an issue. According to a joint statement in December, Nissan and Honda planned to establish a joint holding company by share transfer that would be the parent company to both.
The share transfer ratio was to be determined “with reference to the average closing prices of each company’s shares over a certain period prior to the announcement of the MOU.” The negotiations on a share transfer ratio were expected to start at around 5-to-1, according to a Nikkei tabulation, which significantly cut Nissan’s influence in the new company.
Honda judged that it would take time to rebuild Nissan and discuss the exact integration ratio, and it approached Nissan with a proposal to make it a subsidiary as a way to speed up restructuring. But Nissan — which sought a near-equal role in the merger — became increasingly confrontational.
You can’t have a merger of equals if one company is so much less equal than the other one. It would be hard for Nissan to swallow the idea of being a subsidiary, but it’s the move that makes the most sense right now. This is especially true as the threat of tariffs lingers and Nissan, at the moment, makes about 25% of its cars in Mexico.
Since this news broke, Honda’s share price has gone way up and Nissan’s share price has gone way down, which is as clear a statement of how this news should be viewed as I can imagine.
Germany’s Auto Industry Doesn’t Feel Great About Germany’s Auto Industry
You know it’s bad news when I pull out the “guy working at Volkswagen factory in Germany” photo. I use this photo so often that we should probably give him a name. I’m open to suggestions.
Sentiment in Germany’s automotive industry reached a new low in January, as companies fret about their ability to compete, highlighting the challenges facing carmakers from BMW AG to Volkswagen AG and suppliers including Continental AG.
A business climate gauge by the Ifo institute slumped more than five points to minus 40.7 last month, the Ifo economic research institute said on Wednesday. Companies assessed their position on foreign markets as lower than ever before — both within and outside the European Union. They have also lost ground “significantly” on the German market, Ifo said.
The first step is admitting you have a problem!
Toyota’s Operating Profit Drops 28% As Toyota Can’t Build Cars Fast Enough
Toyota didn’t make as much money last quarter (4th by the calendar, 3rd by the Japanese fiscal calendar) as it would have probably liked, though it remained profitable. What’s the issue? Toyota is having trouble keeping up with demand, so any snag in production is going to hit the bottom line.
Before its earnings retreats — first in the June to September period and then October to December — the last time Toyota booked a quarterly reversal in operating profit was in the July to September period of 2022, as the carmaker grappled with pandemic supply chain shocks.
In the latest October to December quarter, operating profit dropped 28 percent to ¥1.2 trillion yen ($7.8 billion), from ¥1.7 trillion yen ($10.7 billion) a year earlier. Operating profit margin declined to 9.8 percent in the quarter, from a robust 14 percent the year before.
Factory slowdowns in the key manufacturing hubs of U.S. and Japan put the brakes on sales and drove up costs due to idle time. Global output fell 5 percent in the quarter as Toyota gradually recovered from quality and vehicle certification problems in the U.S. and Japan.
It’s going to be fine. It’ll all be fine. Toyota has a plan to build more hybrids, which is what everyone seems to want these days.
Toyota’s new battery plant in North Carolina coming onboard will be a big part of this CFO Yoichi Miyazaki said during the announcement of the Q3 results:
We are working to ensure production flexibility such as through common usage of batteries for BEVs and PHEVs so that we can respond to customers’ needs regardless of what products they choose. Because we will ultimately need to internalize production technology for aptly mass-producing different types of batteries in the same plant and buildings, we made battery manufacturer Primearth EV Energy our wholly owned subsidiary, and it began operations as TOYOTA BATTERY in October 2024.
Cool stuff.
Lexus Owns The Luxury Hybrid Segment
I love this graphic from S&P Global Mobility that shows luxury registrations in the United States per quarter. You can get a sense of how much Tesla has grown and, at the same time, how much the Mercedes approach of focusing on EVs hasn’t worked out as well as Lexus’s hybrid approach.
S&P explains in some detail how this happened:
Nationally, hybrids comprised 13% of all new US retail registrations in the first 11 months of 2024, an increase from 10.3% the year prior. Meanwhile, electric vehicles accounted for 9.1% of registrations, up from 8.4% a year ago. In November 2024, the hybrid share jumped to an all-time monthly record high of 15.3%.
Lexus has been able to take advantage of this surge in hybrid popularity by marketing hybrid versions of its most popular models. In particular, the RX accounts for more than half of all new retail registrations in the upper midsize luxury utility segment, and 20% of these RX registrations are hybrids.
[…]
A list of the 15 most popular luxury hybrids through the first 11 months of 2024 illustrates Lexus’ strength in hybrids (see below). Six of these products are the Lexus brand, versus three Mercedes-Benz products and just one BMW.
The six Lexus models together accounted for more than 4 of every 10 luxury hybrids registered in November 2024 as well, a dominant and impressive performance given that 35 luxury hybrids had at least one registration in November.
Also, I forgot how well the Volvo XC90 hybrid sells.
What I’m Listening To While Writing TMD
Autopian reader Crank Shaft suggested “50 Ways to Leave Your Lover” by Paul Simon as a good song for the Nissan-Renault divorce, and it seems fairly apt for Nissan-Honda-Mitsubishi as well. [Ed note: Ahem]
The Big Question
What is Nissan going to do now?
Photo Credit: Honda/The Three Amigos
Sounds like nissan thinks their mail planes are bigger than they actually are…
Ludwig Guterautoarbeiter
As he appears to be installing the hood prop rods, I’m gonna call him Rowdy Roddy Propper.
Nissan’s gonna Nissan, and if they’re pressed they’re gonna Nissan harden than they ever have before, don’t back them into a corner, Nissan!
From a market standpoint, if the whole thing falls apart and some Chinese company does buy them and move production to China and keep cranking out affordable cars(with the help of egregious labor violations), will consumers notice? I think most of us will know to steer clear, but from an average consumer perspective, it may go as unnoticed as Volvo or Jaguar and to some degree Buick.
We Americans look at Honda and think that based on US sales that they kick Nissan’s ass everywhere which isn’t true. Nissan has a much larger presence in Europe than Honda and Honda’s lead in global sales isn’t that much more than Nissan. So that’s probably why Nissan’s feeling a little miffed. That doesn’t mean they don’t have big issues, but as a brand Nissan still has strength, just not in the US.
Honda doesn’t have Nissan’s crushing debt load and terrible credit rating, they can sell all the cars they want, doesn’t change the fact that Nissan can’t afford to refinance what’s coming due over the next few years without a whole lot of help from someone else
I’m going with Frank Lee Underwhehlmedwithshitz
Otto von Auto.
Wait – Tesla is a luxury brand? I’ve driven a Model S and was a passenger in a Model 3 and there’s no way I would classify Tesla vehicles as anything other than adequately mid-range in terms of comfort, convenience and functionality. They’re nowhere near Mercedes or Lexus in my opinion.
You are now on a list.
Yep. Send this one to the camps for “reprogramming.”
Tesla is a luxury brand in terms of $$$ per car and leasing ratios. Here, literally everyone that had leased BMW in the 20-teens and an Audi in the oughts now leases a Tesla.
Unless “here” is somewhere other than the US, historically Tesla lease rates have been rather low. Though I am sure higher now than in the past due to the current tax credit structure.
At this point, everyone I personally know who owed a Tesla now owns something else. The last holdout having just gotten rid of a Model Y. That’s eight owners and a dozen cars. The first seven because they got fed up with the cars, the last holdout specifically due to Musk.
Tesla kind of earned luxury status by default because its first vehicles cost $100,000 and the giant touchscreen really was a game-changer at the time. There wasn’t as much of the screen backlash as there is now, and people really felt like the cars were the future somehow.
To be fair though “traditional” luxury brands all make some fairly cheap feeling cars too on the low end, and the Model 3 competes with those on price and features.
Elon Musk: “You have committed a crime.”
I rode in a Model 3 last week as my “business comfort” Uber. I was not as impressed by the interior fit and finish nor the materials – it wasn’t Nissan terrible, but my Honda Pilot has nicer finishes and higher quality leather. My next Uber was a Lexus ES and the quality was orders of magnitude better. For that matter, the quality of the materials of my now-dead 20-year old Lexus GX were significantly better than the Model 3, and that isn’t hyperbole.
Honestly Nissan choosing to sign their own death warrant rather than play second fiddle to an objectively better company lines up with my (admittedly rudimentary) understanding of Japanese business practices. It’s an extraordinarily rigid, conservative hierarchy that’s largely made up of people that were chosen for their paths as soon as they were born. As far as I’ve read and been told you cannot violate the hierarchy under any circumstance and need to play by the rules meticulously.
As you might imagine there’s an enormous amount of pride and a lot of unwavering, unchanging ideas from the top that can’t be questioned. Having to resign yourself to being an inferior and admit that you are wrong is profoundly devastating in that world and probably a death sentence for your career. In that context I get why they’d rather go down with the ship than admit defeat.
Anyway, why aren’t there luxury hybrids? Acura has ZERO. All of the German stuff is PHEV and outside of BMW that technology wasn’t taken seriously over there until recently, so the products have lagged behind. There are also 0 Cadillac hybrids, 0 Infiniti hybrids, honestly it’s just nuts to me.
I’ve read that this is because all of the market research indicates that luxury buyers are more EV curious, which the manufacturers have gambled on because they want to sell EVs and EVs are way more expensive than hybrids. But at this stage of the game with BEVs quickly falling out of favor and the financial death sentence of doing anything other than leasing one in mind, it sure seems dumb that there aren’t more luxury hybrids…and this benefits Lexus enormously, because they’ve been selling hybrids for 20 years at this point.
When you’re the only game in town it’s not hard to succeed. It also doesn’t hurt that a Lexus hybrid will go 200,000+ miles with nothing but routine maintenance. I’m pretty sure the vast majority of German PHEVs won’t even come close to hitting six figures of mileage. By the time the warranty is up, the electronics are goofy, the overboosted engines are struggling, and the battery pack is depleted they’re basically giant paperweights.
Even the Japanese press has described Honda as “fiercely independent” so they’re not likely to entertain the thought of equality, especially since this whole thing’s been put onto them by the Japanese government. But pissing off the government probably isn’t a wise move either.
“But pissing off the government probably isn’t a wise move either.”
What would the Japanese government do?
Make Honda pay taxes?
So you think they’re going to hire Carlos Tavares as the new CEO?
I’ve had Lexus RX hybrids for loaners before and they are excellent appliances. While they aren’t quirky or exciting, they do everything right and nothing wrong. Honestly, that’s true for almost all of Lexus hybrids, so I am not at all surprised to see they own the segment.
I think the lack of luxury full-hybrids (FHEVs) is a combination of their lack of power, and EV’s suitability for the luxury segment.
Low power EVs (including FHEVs, PHEVs and those Chinese supermini EVs) are quite power limited by their battery size, since power output scales linearly with pack size; FHEV batteries seem to be capable of about 50hp, but don’t quote me as this could vary wildly. Additionally, a FHEV’s efficacy is highly dependent on their ability to stay in EV mode at low to medium loads on the highway cycle. To achieve this, the vehicle’s weight and drag need to be low enough, which is doable for mainstream compact crossovers and mid-size sedans, but larger, draggier vehicles like the F-150 and Explorer hybrids end up only improving their city ratings, reducing their CAFE effectiveness.
A mild-hybrid (MHEV) can achieve a significant portion of those city MPG gains (especially on EU’s WLTP) at a far lower cost, which is why they’re so popular amongst US market luxury cars and EU/China market cars. Luxury cars’ thirstier engines from higher power requirements, increased drag from styling priorities and extra weight from niceties mean they generally also fall into this camp. A plug-in hybrid’s much larger battery and power output solves these issues, along with adding significant power output and training users for future EV ownership.
EVs seem like a pretty ideal powertrain for luxury car owners: near silent gearless powertrain with inherently little NVH, easily scalable power output with low 0-60 times, not having to visit gas stations, and a somewhat lower chance at roadtripping long distances as owners can afford to fly. Additionally, the luxury segment has more margins to make EVs profitable easier, owners are more likely to pay to install a L2 charger at home. Investor and public pressure also led most to jump straight to EVs, with hybrids still having the Prius reputation when these decisions were made. All these factors make skipping FHEVs for pure EVs a much easier decision for luxury automakers.
Lexus is a unique case, as they are the king of ‘appliance’ luxury car niche, which means that their customers will accept a slowish CVT-like powertrain and are more likely to appreciate the MPG gains. Additionally, their unpopularity in Europe means they weren’t encouraged to go down the MHEV path. Their conservative Japanese corporate culture has accidentally benefitted them in the short-medium term for the US market at least, as they planned on using hybrids to tide them over until hydrogen would take over the market in the 2030s (lol).
Lincoln has a couple hybrids, and they coincidentally also use the same Toyota power-split hybrid architecture.
The German 3 brands have too much of a sporty reputation to really make FHEVs work; Audi feels the most appliancey and they have a mainstream brands in VAG who’d also want FHEVs, but Dieselgate meant they had to skip to EVs.
Infiniti briefly had the Q50 hybrid in 2015, but it was discontinued quickly; they are far too underfunded to bring anything to market. Acura might get a hybrid in the Integra or their new subcompact. Both Honda and Nissan are limited by having series hybrid systems that are much better suited at being EREVs with an N/A I4 than using a turbo I4 or V6 for larger applications.
GM intentionally abandoned hybrids to focus on EVs, which are needed to maintain their previous success in China (remember that Buick, and maybe Cadillac, would not exist without China). Unfortunately for them, Ultium was overweight and probably used the wrong battery cell type, so the Chinese overtook them anyways due to their poor execution. However, I don’t really think it was the wrong the wrong decision given their position. Most of their Chinese market ICEs are 48V MHEVs.
Genesis is too low volume to support both FHEVs and EVs, but I think their X Electrified series is right for them.
Stellantis is a mess, they can’t even tune an EV powertrain right; they’re better off skipping straight to EREVs instead of grenading FHEV transmissions.
I’m kinda OK with most luxury brands going PHEV, as their buyers are best suited to EREV or EV ownership.
“ But Nissan — which sought a near-equal role in the merger — became increasingly confrontational.”
“What is Nissan going to do now?”
Nissan’s top execs can go screw themselves. The company deserves to go into creditor protection/receivership. Then a company like Honda can buy the pieces it wants and leave Nissan’s arrogant leaders out of the equation.
So they can do that ORRRR… clue into reality and accept this is not a “merger of equals”. It’s Honda bailing their sorry asses out.
Thats Hans Hinternchin, or Hank Buttchin in Detroit.
What is Nissan going to do now? Well they could go Rouge, but at this point it would take an Armada of Titans of industry to do so. Maybe this is just a negotiating Juke so the execs can still try to get their Kicks. Altima(tly) though, it seems like nothing but the dream of a bunch of Murano’s.
Z
A fair lady of industry you say? Maybe there’s another stanza of this story to be written? They won’t be able to push the boundaries of their frontier without it. With the right merger, their skyline might just be a bit brighter. I’m sure they’ll find the right path finder, who can help them stretch their sales to infiniti and beyond (just like buzz lightyear).
Take note, I doubt Nissan will be able turn over a new leaf. I don’t think their future is very sunny these dayz.
Pao Pao, these comments are the Cherry on top.
Unless Nissan has exciting new platforms and powertrains in the pipeline (which they don’t due to finances), they are not much in a position to remain steadfast in their negotiations with Honda. I’m guessing that the executive suite and boardroom there has alot of overly inflated egos which need to be knocked down a peg or the company might just die on the vine. If that happens, Honda (and others) will scoop up the valuable assets and IP that Nissan has at fire sale prices and those inflated egos will be out of work.
Knowing how Japanese society works, I can’t really say that I’m surprised here. I really do hope though that the company won’t be liquidated and that they can find a path forward, but again, that path forward is most likely a merger between them and another auto manufacturer and at the end of the day will simply be another brand in the portfolio.
HOT TAKE: Nissan’s dark knight won’t be a Japanese company. They could get scooped up by VW, Stellantis or GM but not Ford. GM could be the most likely if they are interested because they are not European.
Getting bought up by Stellantis would have to feel like selling yourself to the circus or something.
Yip, they have a billionaire playboy as a chairman so anything could happen. Describes himself as Franco-Italian so probably will not shut down Chrysler and buy Nissan, but then another self described billionaire has just said the US should buy Gaza and build a resort there…
I have heard whispers in France that there are moves for Stellantis to get rid of US ops and concentrate on Europe where it has expertise — but they French have not realised yet the major shareholder is the playboy chairman….
Don’t count out an Indian company, either. Tata or Mahindra would love to scoop them up, I’m sure.
Yep… big miss on my part.. I see Tata being the better suitor here.
“Gloven Offervall.”
In a country where Honor and Courtesy mean everything, it’s easy to see why this happened.
There’s two ways a merger like this can go, a “Merger of Equals” where one company gets ruined because they want a seat at the adult table when they’re not ready for it, or a more realistic merger where Nissan becomes a subsidiary, and their portfolio can actually be changed and assessed as it should.
I just cannot fathom why Nissan seriously want’s what happened to Chrysler, because that “Merger of Equals” ended so well…
I don’t think a “merger of equals” situation is a risk. The difference here is that Chrysler was doing pretty well for themselves at the time.
Hondatsun is more like what happens when the teacher picks partners for a class project but Honda knows they’re going to end up doing more of the work.
A Dune and a Futurama reference!? In my automotive news!? I’m definitely in the right place.
Sand, Blackjack, and Hookers!
You know what! Forget the sand!
Yep, I hate sand on my cards and hookers.
The last good leadership Nissan had was President Yutaka Katayama, and he retired in 1977.
As I have started previously, there are no mergers, only acquisitions. A corollary is there are no co-CEOs.
He looks like a Hans to me. Hans Schadenfreude. He spends all day staring at a train wreck, and he can’t look away.
Nah, definitely more of a Karl-Heinz than a Hans
Felix
Gööber
Needs more umlaut.
“You were going to spend 60 billion dollars to save our dumb asses again after (probably) being directed to by the Japanese government and you want a say in how we run things?”
I think the German factory worker should be called Jules, aka “Schlect Motherf*cker” because he’s looking at something interesting in an open briefcase. Er…hood.
Since it’s a VW, it isn’t glowing because the fire hasn’t started yet.
I’d also accept just calling him “Eric Stoltz” because the industry is probably gonna need some adrenaline in the heart at some point.
Spoiler alert?
It will be very difficult for Nissan to get a foreigner CEO again… Ghosn shut down a Nissan factory in Japan straight away, and that more or less straight away improved the finances.
No Japanese boss would to that.
But Nissan does still have a good rep in many countries in Africa, better than Honda for example, and could really work on its exports of what in the US are seen as very small pickups, and mini-buses, where it can take on Chinese newbys and win.
Whether it will be able to turn its back on high-tech dreams is another matter.
Ghosn was exactly what Nissan needed for a brief period of time, but he should’ve been gone once they were back on better financial footing. He is not a car person, he’s a finance person, and Nissan really failed to innovate during his tenure because he was so obsessed with cutting costs. I’d bet that the same morons who kept him on for too long are the same ones grenading this deal with Honda.
This is the correct take. Well said
“Nissan Seems To Be Screwing Up The Honda Merger In The Most Nissan Way Possible”
They T-boned Honda’s headquarters while simultaneously vaping and retweeting a dank meme?
Nissan is being very Altima-like lately. But like the mighty Altima, no matter how many wheels have fallen off or how on fire it is, it still blazes down the highway at 93 mph with a baby and a pitbull rolling around unrestrained in the backseat.
In other news: Nissan has announced the appointment of a new, previously unknown CEO, a Mr. Carlos Seravat. He apparently has a gigantic mustache and is obsessed with the idea of raising the price of every vehicle by 800%.
I hear he looks a lot like Will Ferrell.
Don’t tell me, he’s also a very accomplished pianist.
Nissan is going to get bailed out by the Japanese government.
I believe Honda engineered Nissan’s refusal by their offer because Honda doesn’t want this merger either. And I believe they’re correct.
Entirely possible, but I also believe that Nissan’s management is just that bad at business. They’re ashamed they’re even in this position and are trying to save face.
Ah, yes, “saving face”, the eternal boat anchor dragging down eastern civilizations. Such a worthless concept.
I think you’re correct. Honda execs quietly trying to torpedo the government’s bad idea of saving NIssan.
I agree and don’t agree. Nissan management is horrible. That is the biggest problem they have.
I think Honda would do ok if they ended up with Nissan vehicles. Nissan makes ok cars for people that don’t have the credit to get a Honda. They do seem to make good EVs and Honda’s experiment with GM at making EVs has brought along GM being GM when it comes to teething problems.
But Honda can’t afford to end up with any of Nissan Management.
All Honda has to do to torpedo the deal is give the Nissan Execs access to a microphone or a press release. Since the execs are accepting buyouts, then Honda is doing exactly that.
“But Honda can’t afford to end up with any of Nissan Management.”
100%. Historical bad management aside, it seems incredibly unlikely at this point that Nissan’s management would ever submit to acting like just a Honda subsidiary. Even if they become a Honda subsidiary, you’d have hostile managers and the culture would tank.
I’ve been through more mergers than I want to think about. Ok, merger isn’t the word, it’s acquisition.
There are two ways that management works with these things.
2 is actually MUCH more common than 1, because a lot of times, the value of a company goes up so much after it absorbs a competitor that the management in the successful company cashes out and retires.
Nissan isn’t willing to do Option 1. Honda would be moronic if they allow option 2 to happen.