Nissan CEO Makoto Uchida could leave this week, putting merger with Honda back on table

It looks more and more likely that failing to get the Honda merger over the line could cost Nissan CEO Makoto Uchida his job, according to Nikkei Business. The Japanese publication reports that the embattled carmaker convened on Thursday to select a successor and will announce its decision this week.

The news comes less than a month after Nissan terminated talks with Honda over the latter’s proposal to make Nissan its subsidiary. Subsequently, it was reported that while Honda was willing to restart merger discussions, it would only do so once Uchida resigned.

With the company still in crisis, Nissan appears to have acquiesced to Honda’s demands, with one insider saying: “We don’t know if it will be [as] a wholly owned subsidiary, but the talks will probably proceed in the direction of accepting Honda’s investment.” The firm is also considering a proposal of a four-way collaboration from Taiwanese phone maker and aspiring carmaker Foxconn, which would also involve Nissan’s alliance partner Mitsubishi.

A source said before the selection on March 6 that while “opinions are divided on the next top candidate,” the majority of the nomination committee was leaning against approving Uchida to remain in his role, given that his resignation was a condition for Honda to return to the table. “We are approaching a time when personnel, including the top management, will undergo major changes,” said a Nissan insider.

One candidate for the role is current chief financial officer Jérémie Papin, at least in the interim. Should Honda agree to renegotiate, it is expected that Papin will take the lead on Nissan’s side. For his part, Uchida indicated his intention to defer to the nomination committee’s decision after announcing the collapse of negotiations with Honda.

“The final decision will be made by the nomination committee, the board of directors and the shareholders, but it is my responsibility to put a stop to Nissan’s slump in performance and bring the confusion to an end. I would like to ensure that the company is on a clear path to a turnaround. However, if I am told that ‘Uchida is no longer needed,’ I will not cling on [as president],” he said.

Sources also said that calls for Uchida’s resignation are being pushed forward by Nissan’s main bank, Mizuho Bank. Following the failure of negotiations with Honda, a nomination committee member – an outside director linked to Mizuho Bank – strongly urged Uchida to leave his post and is “leading the discussions of the nomination committee,” one source alleged.

The bank is apparently in favour of renegotiations with Honda, and the said external director appears to be singling out Uchida for his responsibility in the lack of progress regarding the Honda merger as well as for inadequate restructuring measures. “The external director was in favour of the business integration with Honda, so he probably sees anyone who opposes it as an enemy,” the aforementioned source said.

Meanwhile, Jean-Dominique Senard, a committee member from Renault who had so far shared Uchida’s stance, now also seems to be in support of the latter’s resignation, as he believes the collaboration with Honda and Foxconn will be a positive factor in raising the value of the Nissan stock he holds. One source said: “Uchida himself has not changed the intentions he expressed at the press conference. However, the way people around him see him has changed. It’s a matter of how we respond to that.”

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