| Thanks for reading Hyperdrive, Bloomberg’s newsletter on the future of the auto world. Finding a Future for Nissan | Carlos Ghosn and Nissan have no shortage of axes to grind with one another. Mercifully, that wasn’t the focus of discussion on Friday with Bloomberg Television. The former chairman and CEO of the Japanese automaker and its French alliance partner, Renault, spoke frankly with Bloomberg’s Manus Cranny about Nissan’s pursuit of a deal with Honda, what Renault wants, and why iPhone manufacturer Foxconn has been in the mix. Here are highlights from the interview that have been edited for length and clarity: Is this a pragmatic deal, or a desperate roll of the dice? It’s a desperate move. It’s not a pragmatic deal because frankly, the synergies between the two companies are difficult to find. They’re in the same markets, they have the same products, the brands are very, very similar. From one side, Nissan, it’s a desperate move to try to find a future. And from the other side, Honda — if I understand well, they were not very excited about this move, but you know, you have to count with METI in Japan. They’re trying to figure out something that could marry the short-term problems of Nissan, and the long-term vision of Honda. Are politics behind this deal then, rather than value? Without any doubt. From all the data that I’ve received about the performance of Nissan — which has been miserable at least for the last two to three years — they have cash problems, investment problems, they’re being really hammered in the US, they’ve practically got out of Europe, they’re being challenged in China, and there is no plan in front of it. There is panic mode inside Nissan.  Nissan’s headquarters at dusk last month in Yokohama, Japan. Photographer: Kiyoshi Ota/Bloomberg Is the Japanese government going to have to offer backstops to Honda, to make this deal work? Obviously, Honda must have some kind of benefit out of it, if not in the short term, at least in the mid and long term. But they will be closely monitored to make sure that the impact on the Japanese society isn’t going to be too big. When you have two companies of this size, and they are practically in the same markets with practically the same strengths and weaknesses, there’s going to be a lot of cost and duplication to be taken out. This is going to be closely monitored by METI. Is this Japan putting two companies together to stand up to the competition from China? Without any doubt. The Chinese automakers are on the winning side. They became the largest exporter of cars, they’re the largest maker of EVs. They’re successful in a lot of new technologies, they’re doing fine cars. In a certain way, yes, it’s a defensive mode, trying to shore up the Japanese industry and avoiding a cataclysm. Foxconn has paused their pursuit of a deal. Is a savior for Nissan going to have to be found within Japan? Will there be a savior? I don’t know. I know how tough it’s going to be, because Honda is an engineering organization. It’s very strong at engineering. And Nissan is very proud of its own engineering. The battles here to try to decide what technology is going to be adopted by the new company, if it’s a merger, or by the new alliance, I can tell you is going to be very tough.  Ghosn speaking with Bloomberg Television at the Paris motor show in October 2018. Photographer: Marlene Awaad/Bloomberg Economics Is this Renault’s moment to exit? Do you think that’s what they hope for, or will they want an equity participation? Oh, no, no, no. The Renault-Nissan alliance is a zombie. There is an appearance of collaboration, but there’s practically no collaboration at all. Renault is trying to maximize its assets inside Nissan. They’re trying to get the most money out of their shares, but in my opinion, they will sell to Honda, without any doubt. You were known as Davos Man, as the voice for free trade. The world is bracing for a next round of trade disruption from Donald Trump. What are auto CEOs thinking about this, but cannot say? This is an industry which is by definition a global industry. You can’t survive as an automaker if you are restricted from accessing any market in the world. Size matters, investments are huge, economies of scale are extremely important. This industry is living on globalization. It’s very bad news for all the automakers to know there are going to be tariffs, obstacles for them to be present in all the markets. This will translate into a lot of them having problems, and certainly a higher price for cars in all the markets. Do you think you’ll see a major auto failure in 2025? There is no auto failure. There are companies that are so weak that somebody else comes and buys them. When you look at the market capitalization of Nissan today, it’s really very small, and I can understand that a company like Foxconn — headed by very serious and realistic management — is going to say, ‘You know what, instead of us investing to do our own electric car, let’s buy a car company.’ They’re not going to be the only one to try to do that. Instead of building something from scratch, you can take control of an existing car manufacturer at a relatively cheap price, get rid of everything you don’t need, and really concentrate on what’s important. I’m expecting a lot of moves like this in the future, particularly for the weaklings of the car industry.  Bernie Moreno speaking at the Republican National Convention in July. Photographer: Al Drago/Bloomberg Bernie Moreno, the Ohio auto dealer elected to the US Senate in January, wants to carve out a major role for himself shaping automotive policy during a second Trump term. Among the items on his agenda: agitating for Stellantis to divest Jeep, Ram, Dodge and Chrysler, which he believes have been grossly mismanaged by European interests and belong back in American hands. “They’ve been a terrible steward of the brands,” Moreno said by phone Wednesday while crisscrossing his home state in a Jeep Grand Wagoneer sport utility vehicle. “I’m hoping that John Elkann does the right thing and spins off Chrysler Corporation and puts its back in American ownership.” | 
