A struggling Japanese carmaker faces possible bankruptcy. Encouraged by its government, another automaker rides to the rescue and buys control.
The year was 1966, and Nissan stepped in to save Japan's Prince Motors. Although that rescue eventually succeeded, it was not easy. Indeed, as BMW's 1994 purchase of Rover showed, the acquirer of a weak carmaker faces only trouble unless it exerts strong control from the start.
The management of the acquired company must recognize, as Prince's did, that its nameplate might disappear but for the buyer. So the acquired company cannot resist reforms proposed by the financial angel.
The mergers that have the greatest chance of success, such as Daimler-Chrysler and Ford-Volvo, are marriages of two already strong carmakers. The proposed union of Nissan and Renault is not such a merger. Although Renault's balance sheet is better than Nissan's, neither company is fiscally robust.
Both companies have strengths. Nissan's manufacturing prowess and technology could be a good fit with Renault's styling flair. The combination would have substantial operations in Europe, North and South America, Japan and elsewhere in Asia. But Renault will have to be savage in integrating the companies' operations and in cutting costs.
Someday, it might be powerful. After all, Renault and Nissan are proud names that have contributed much to the development of the global auto industry.
But the management of both Renault and Nissan must recognize that much difficult work lies ahead. Otherwise, they will be like two drunks trying to steady each other after a night of carousing.