What does this mean for Honda’s 10,000-plus Ohio employees?
Bottom line: It’s too soon to say.
“This announcement will have no immediate impact on our local operations,” said Chris Abbruzzese, a spokesman for Honda in Ohio. “As Honda Motor is currently in the initial stages of discussions regarding business integration, we are unable to provide further details at this time.”
Honda said it has reached a “basic agreement” with Nissan and Mitsubishi to start discussions based on the framework established in an earlier memo signed by Nissan and Honda in August on a “strategic partnership” focused on intelligence and electrification.
“The three companies have been proceeding with discussions,” Honda said on Dec. 23.
Honda and Nissan are weighing the creation of a joint holding company “amid the dramatic changes in the environment surrounding both companies and the automotive industry,” Honda said.
Among the reasons for exploring a merger: Critically examining plants and jobs.
“The companies anticipate that optimizing their manufacturing plants and energy service facilities, combined with improved collaboration through the shared use of production lines, will result in a substantial improvement in capacity utilization leading to a decrease in fixed costs,” Honda recently said.
Nissan has two plants in Tennessee and one in Mississippi. Honda has Ohio plants in Marysville, East Liberty and Anna, about an hour’s drive north of Dayton, and a Honda/LG Energy Solution joint venture is building an electric vehicle (EV) battery plant in Fayette County. A Honda distribution center is in Troy.
Abbruzzese said nothing has changed with Honda’s plans to create an “EV hub,” which involves the retooling of its Ohio plants this year, and construction of the joint venture EV battery plant is making progress, he added.
Erin Keating, an executive analyst with Cox Automotive Inc., said the nation has seen automaker mergers before. But intense competition with China and the gradual transition to EVs make today’s landscape different.
Credit: JIM NOELKER
Credit: JIM NOELKER
“There are a lot of eyeballs on it (a potential merger), but it makes a lot of sense,” Keating said.
Honda and Nissan offer a few vehicles where the lines arguably overlap — Keating mentioned the Nissan Rogue, which is assembled in Smyrna, Tenn., and the Honda CR-V, which is made in Greensburg, Ind.
But any shift in the manufacturing landscape and jobs outlook would take a couple of years to become fully felt, she said.
“The question is, is there something they could do around those segments in the future,” Keating said. “I just think it will be a couple of years out before any kind of major product decisions will get decided, if they do in fact merge.”
She added, “If anything, I would assume that perhaps they really keep all the manufacturing up here for the appropriate brands because of all the logistics happening in the geopolitical space. They need to have U.S. sales and -assembled vehicles.”
President-elect Trump has sung the praises of tariffs, and has pledged to impose tariffs on U.S. imports early in his incoming administration.
The Nissan Armada, an eight-seat SUV, and Nissan Titan are two vehicles larger than anything Honda currently offers. If Honda wants to be competitive across all segments, that could prove to be of benefit to Honda, Keating said.
Nissan “is not a two-bit player,” she said. The automaker has had its share of challenges, but the company boasts some heft, is known for strong power trains and innovative technology. Nissan Group announced calendar year 2024 U.S. sales of 924,008 vehicles, an increase of 2.8% over 2023′s sales .
Honda in America posted sales of 1,423,857 Honda and Acura vehicles last year, an increase of 8.8% over 2023.
Ryan Augsburger, president of the Ohio Manufacturing Association, sees opportunity in a merger. In general, Honda’s track record in Ohio since 1979 has been consistently positive, he said.
Until the COVID-19 pandemic, Honda never laid off any full-time employees in Ohio.
“We think the possibility is exciting for Ohio,” Augsburger said. “One only has to look at the track record.”
The Dayton Daily News, part of Cox First Media, and Cox Automotive, are both part of Cox Enterprises.
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