Carlos Ghosn calls Nissan-Honda-Mitsubishi deal a 'disguised takeover' by Honda

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 tie-up among 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 team the companies to work on electric and software-defined vehicles and joint procurement.

Nissan and Honda have begun outlining details of the idea, which stretches back to a preliminary agreement in March, saying they would first jointly research an automotive software operating system over the 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 lives 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 funding and investment, are up in the air. Meanwhile, adding Mitsubishi to the mix brings another voice that could complicate 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 face big challenges. The relationship, he added, seems more like a budding Honda takeover than a true collaboration of equals.

That is partly because Honda is the strongest of the three by far, Ghosn said.

Nissan saw ballooning U.S. incentives nearly completely erase its profit in the April-June quarter, as it struggles with sustaining global sales volume growth. The company posted a 4.1 percent increase in global sales to 3.4 million in the fiscal year ended March 31.

Ever since rebalancing the alliance with Renault last year to gain independence, Nissan has resembled a company "trying to find a savior," Ghosn said. "Signing an agreement with Honda looks like an initiative of trying to turn attention away from the miserable results."

Honda reports its fiscal first-quarter earnings Aug. 7.

Japan's No. 2 automaker, in contrast to Nissan, announced record operating income in the fiscal year ended March 31, as global sales climbed 11 percent to 4.1 million vehicles.

"I can't imagine for one moment how it's going to work between Honda and Nissan unless it's a takeover, unless it's a disguised takeover by Honda of Nissan and Mitsubishi with Honda in the driver's seat," Ghosn said. "It's going to be a takeover, a disguised takeover."

Nissan and Honda haven't discussed capital cross-holdings between each other, Nissan CEO Makoto Uchida and Honda CEO Toshihiro Mibe said at their joint news conference.

But Mibe added that he isn't ruling it out.

The partners are considering many options, perhaps even setting up a new company, the Honda boss added. Honda took that approach in establishing a separate EV venture with electronics and tech giant Sony.

Ghosn was sent by Renault to Japan in 1999 to lead Nissan back from the brink of bankruptcy. His initial success in turning around the troubled Japanese industrial icon won him accolades as a managerial miracle worker. He was soon entrusted to head both the French and Japanese carmakers, becoming the first person to simultaneously lead two Fortune 500 companies.

By 2016, he had orchestrated Nissan's purchase of a controlling 34 percent stake in Mitsubishi Motors Corp., solidifying the grand alliance's position as the world's biggest auto group.

Looking back, Ghosn said successful partnerships are a holistic balancing act.

"Saying they will work together is just 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 repartition of the work," Ghosn said. "You need to work on synergies. You need to make sure that you're not fixated about your identity or your national belonging. You need to really look at your bottom line, at increasing your revenues, cutting your costs."

The new alliance taking shape might have trouble delivering on all its potential, given Honda's history of determined independence, Ghosn said. Honda has never been in a significant capital tie-up with another carmaker, although it has had loose ties with General Motors.

During his time at Nissan, Ghosn said the company never considered pairing with Honda.

Ghosn's era at Renault-Nissan-Mitsubishi crashed to an end with his arrest and eventual indictment in Japan on four charges of financial misconduct.

The former Nissan executive, who denies any wrongdoing, says the charges leveled against him were concocted to block Nissan's fuller integration with Renault.

Ghosn has holed up in his ancestral homeland of Lebanon since fleeing Japan in a dramatic dark-of-night escape packed in a box aboard a charter jet. Japan issued an Interpol red notice for his arrest. But Ghosn holds a Lebanese passport, and Lebanon doesn't extradite its citizens.

Ghosn said he spends his time now teaching at a local college and fielding overtures from startups seeking business advice. He continues to fight various legal cases around the world, including in Japan, where prosecutors are still pursuing criminal charges and Nissan has brought a ¥15.5 billion ($105.8 million) civil complaint. Meanwhile, Ghosn has filed his own civil claim 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 have turned the page. I'm having my own life here. I'm a 70-year-old man. I had a very hectic life, so I'm trying to enjoy a little bit of time for me also."