Angel Jaramillo Torres
The corporate headquarters of Honda and Nissan are not very far from each other. The headquarters of the large company known for its motorcycle production are located in the municipality of Minato in Tokyo. A slender red and white tower reminiscent of the Eiffel Tower dominates the landscape near where Honda’s strategists and senior officials toil away on slow metropolitan afternoons. On the other hand, the Nissan headquarters is located in Yokohama, a city that dominates Tokyo Bay. From certain angles, the Rainbow Bridge is reminiscent of the Brooklyn Bridge—New York nostalgia.
These two companies have different origins in Japanese business history. Nissan was a Zaibatsu for some time, and its history goes back to 1911, just four decades after the Meiji Reform. However, it was consolidated in 1928 when Yoshisuke Aikawa founded Nihon Sangyo. The name Nissan comes from the abbreviation used by the company on the Tokyo Stock Exchange.
Honda, meanwhile, is one of the first Keiretsus. After injuring his eye in a car race, Soichiro Honda worked for Toyota for a few years before founding his own company, which he named after himself a few years after the end of the Second World War.
Both companies were successful in their respective niche markets. Nissan achieved this through a series of alliances involving the French company Renault and the Japanese company Mitsubishi Motors. Thus, since 1999, Nissan has been able to navigate the stormy waters of international markets with some success. More potent economically than Nissan, Honda has a more disruptive and daring business culture than Nissan, which is more cautious.
Despite this, the managers of both companies thought months ago that they could merge and take advantage of their competitive edge to face the accelerated changes that the automotive industry and market have undergone. These changes have been very rapid, as we are entering the era of hybrid cars in a particular sense: they operate using cutting-edge technologies together with traditional ones. In any case, they are a new generation of vehicles, and the Europeans and Japanese are lagging behind the Americans and Chinese. In a way, the symbol of all this is Elon Musk’s Tesla company.
Thus, it was imperative for Nissan and Honda to adapt their production to the new challenges. The deal did not go through, and the failure was announced recently by the CEOs of both companies. The reason, in part, was that Honda apparently changed its mind about a previous agreement whereby the merger would be carried out under the idea that there would be no hierarchy between the two partners. Honda probably had some justification for this, given that Nissan is a smaller company. It was natural that Honda should have less interest in merging its destiny with its Japanese counterpart.
As a result, Nissan announced the dismissal of Makoto Ushida as its CEO and his replacement by the Mexican Iván Espinoza. It is not the first time that Nissan has given positions of responsibility to people from Mexico. Not long ago, it appointed the Mexican Mayra González as Nissan’s Global Sales Director. However, she now holds the position of divisional vice-president of transformation, sales, and marketing for Africa, the Middle East, India, Europe, and Oceania.
The Nissan executives must have seen some talent in the Mexicans. The challenge for Iván Espinoza will be no small one. After the fiasco in the negotiations with Honda, Nissan’s biggest problem persists: how to successfully face the Americans and the Chinese in the dispute over the automotive market of the fourth industrial revolution.
A degree from the Monterrey Institute of Technology and Higher Education (ITESM) and 22 years of working for the company will soon have to bear fruit.
Meanwhile, expectations are high in the building with shiny blue windows in Yokohama.
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