Shift and diverge: Why mergers like Honda-Nissan's often crash

The Japanese automakers Honda and Nissan are discussing a possible merger, in a bid to share costs and help themselves compete in a fast-changing and increasingly competitive industry.

- NEAL E BOUDETTE

But a merger, even of two companies from the same country, is no guarantee of success, and the history of automotive deals is littered with failures and disappointments. Combining two large, global manufacturing operations is an incredibly difficult feat that involves reconciling different technologies, models, and approaches to doing business. A merger's success rests on getting ambitious managers and engineers who have spent decades competing with one another to cooperate. Teams and projects have to be scrapped or changed, and executives must cede power to others.

Thomas Stallkamp, an automotive consultant based in Michigan, was involved in the struggles of one of the biggest auto mergers, the 1998 merger of Chrysler and the German company Daimler. Stallkamp spent years in senior roles at Chrysler and DaimlerChrysler. "Car companies are big, complicated organisations, with large engineering staffs, manufacturing plants all over the world, hundreds of thousands of employees, in a capital-intensive business," Stallkamp said. "You try to put two of them together and you run into a lot of egos and infighting, so it's very, very difficult to make it work."