Photo/Illutration Nissan Motor Co. and Honda Motor Co. (Asahi Shimbun file photos)

In the end, Nissan Motor Co. refused to take a backseat, even to larger rival Honda Motor Co. 

Their ambitious management integration plan that could have reshaped Japan's and the global automotive industry has fizzled out just six weeks after the talks began.

The discussions, which started with high hopes, misfired amid deep-rooted disagreements over equality in the partnership, decision-making speed and restructuring plans.

On Feb. 6, Nissan executives, including President Makoto Uchida, drove to Honda’s headquarters in Tokyo’s Minami-Aoyama district in their luxury Cima and Ariya models.

An hour-long meeting followed, effectively slamming the door on the management integration.

The decision came after Nissan’s board of directors met on Feb. 5 and steered toward ending the integration talks.

“Honestly, it’s regrettable that it has come to this conclusion,” a Honda executive said.

The disconnect between the two automakers began at the news conference on Dec. 23, when they announced the start of the talks for management integration.

One of the key disagreements centered on their interpretation of equality.

“Please avoid using the term ‘rescue’ in reference to helping Nissan,” the Nissan president firmly told the Honda president before the news conference.

Uchida emphasized at the news briefing, “Neither side is above or below the other.” He made it clear that the integration was meant to be a partnership between equals.

However, Honda had a different understanding of the pecking order. 

“Some of Uchida’s remarks didn’t sit well with us,” a Honda executive said.

Honda’s market capitalization is five times larger than Nissan’s and its vehicle sales are also higher.

Boasting a highly profitable motorcycle division, the gap in overall performance is clear.

The two entities had agreed that after the integration, Honda would appoint the president and a majority of the directors in a newly created holding company that would oversee both automakers.

“We assumed Nissan understood which side would be taking the lead,” a Honda executive said.

Another factor behind the disconnect was speed in corporate decision-making.

Honda President Toshihiro Mibe repeatedly stressed that traditional approaches wouldn't be enough to compete with emerging players such as Tesla in the United States and BYD Co. in China.

Nissan’s president agreed.

However, an industry insider familiar with both automakers predicted, “Honda makes decisions quickly. Nissan might not be able to keep pace.”

Honda set an absolute requirement for integrating with underperforming Nissan: the company had to finalize its restructuring plan by the end of January.

But internal discussions at Nissan faced difficulties.

A Honda executive grew impatient, saying, “We’re not seeing any concrete proposals at all.”

Some Honda executives criticized Nissan for not taking bold enough measures, as its plan only included voluntary retirement buyouts, mainly at overseas factories, and scaling down production lines without closing any plants.

Faced with such criticism, Nissan said, “Honda is going too far.”

A Nissan executive pushed back, saying, “We’ve already presented a concrete plan, including a reduction of 9,000 jobs. Honda is just rushing us because of internal opposition to the integration.”

“Why is Honda talking down to us?” the executive wondered. 

The final straw was Honda’s proposal to turn Nissan into a subsidiary.

Initially, the timetable for deciding whether to continue the management integration talks was set for the end of January, but it was extended to mid-February.

Believing that integration was the best road forward, Honda said it floated the idea of making Nissan a subsidiary.

For Honda, this was also a “final ultimatum,” as Nissan had yet to present the promised restructuring plan, according to a Honda executive.

However, Nissan strongly rejected the proposal.

“(Honda) threw us a curveball we were never meant to catch,” a Nissan executive said.

The executive went on to speculate, “Honda must have known we would push back―maybe it just wanted to end the talks.”

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