Japanese vehicle makers Honda and Nissan are discussing a possible merger, in a bid to share costs and help themselves compete in a fast-changing and increasingly competitive industry. But a merger, even of two companies from the same country, is no guarantee of success, and the history of automotive deals is littered with failures and disappointments. Nissan vehicles on the production line at the Renault Nissan plant in Chennai, India.
Credit: Bloomberg Combining two large, global manufacturing operations is an incredibly difficult feat that involves reconciling different technologies, models and approaches to doing business. A merger’s success rests on getting ambitious managers and engineers who have spent decades competing with each other to co-operate. Teams and projects have to be scrapped or changed, and executives must cede power to others.
In some cases, the merging companies are hamstrung by elected leaders who force them to keep operating money-losing factories. Thomas Stallkamp, an automotive consultant based in Michigan, was involved in the struggles of one of the biggest car company mergers: the 1998 merger of Chrysler and German company Daimler. Stallkamp spent years in senior roles at Chrysler and DaimlerChrysler.
“Car companies are big, complicated organisations, with large engineering staffs, manufacturing plants all over the world, hundreds of thousands of employees, in a capital-intensive business,” Stallkamp said. “You try to put two of them toget.
