The secret seems to be in the two CEOs’ preference for the pragmatic over the grandiose. The two automotive giants’ hookup is essentially a series of one-offs.
The companies have taken small equity stakes in each other but profess no interest in merging. Instead, they work up business cases and do the projects that seem most promising.
$1 billion Mexico plant
That may seem modest in scope. But Renault-Nissan and Daimler aren’t just saving money on paper clips. A quick sampling:
- The two companies are building a $1 billion plant in Aguascalientes, Mexico, to assemble luxury compacts for Mercedes-Benz and Infiniti.
- The Infiniti Q30 compact shown in Frankfurt was developed on a Mercedes architecture.
- Infiniti will get a Daimler-designed four-cylinder engine built at an Infiniti engine plant in Decherd, Tenn.
- Mercedes is developing a one-ton pickup on the bones of the Nissan Frontier.
The key, executives say, is that they do only win-wins. They don’t do a project that favors one side, hoping to rebalance things next time.
Both automakers have unsuccessful mergers in their past — Renault’s aborted attempt to merge with Volvo in 1992-93, and, of course, DaimlerChrysler. Perhaps that’s why Zetsche and Ghosn show no interest in a full-fledged merger.
Throughout, the companies’ cooperation follows a careful etiquette, down to the details of the press conferences. Those rotate between the alternating European fall auto shows in Frankfurt -- Zetsche’s turf -- and Paris -- Ghosn’s turf. At them, the public relations persons for the two companies take turns recognizing speakers.
At Frankfurt, without ever mentioning the name “Sergio Marchionne,” the two CEOs managed to pooh-pooh the Fiat Chrysler Automobiles CEO’s position that industry mergers are critical for survival.
Noting “all the current talk of consolidation in the industry,” Ghosn said the Renault-Nissan-Daimler arrangement “points to a smarter way to increase value for our companies and our shareholders.”
Zetsche was succinct: “Everyone knows you don’t change a winning team.”