Transcript:
Conway Gittens: A deal to create the world’s third biggest automaker is falling part. Talks between Honda and Nissan have hit the skids a few weeks after they began. The deal has gone afoul after Honda, the bigger of the two, wanted to switch from a merger of equals to Nissan becoming a subsidiary of Honda. The tense negotiations have spilled out into the Japanese media.
If the deal indeed falls through ,it could spell big trouble for Nissan. Sales have been in a slump for years after a rigid Japanese culture forced its charismatic leader Carlos Ghosn to flee the country in the most bizarre way. He was smuggled out of Japan on a private jet inside a large freight box to avoid facing charges of financial mismanagement.
Related: The landmark Nissan-Honda merger is taking a surprising new turn
Since then, Nissan’s problems have only gotten worse. It hasn’t kept up with changes brought on by the EV revolution. In the U.S., drivers prefer EV-gas hybrids, which Nissan and its troubled merger partner Honda lack in. Meanwhile, in China, the strength of homegrown brands is muscling out everyone else including those two.
Nissan, however, has an additional problem. Mexico is Nissan’s top manufacturing hub in the world. With Trump threatening to slap tariffs on Mexican goods, Nissan’s profitability is sure to take a hit. As it stands, Nissan is already on track to slash its global workforce by 9,000 and reduce its factory capacity by 20 percent.
Turning to markets now, Walt Disney helped lead the Dow higher Wednesday. Quarterly sales and profits beat forecasts thanks to the box office strength of Moana 2. But on the downside, subscriber numbers for Disney+ fell for the first time since the streaming service launched in 2019.
That’ll do it for your Daily Briefing. From New York City, I’m Conway Gittens with TheStreet.
