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Oil and water: why Nissan and Honda are setting aside their rivalry

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Oil and water: why Nissan and Honda are setting aside their rivalry

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In the summer of 2020 when the Financial Times reported that Japanese government officials had tried to merge Honda and Nissan, sceptics scoffed at the idea as akin to mixing “oil and water”. Nearly four years later, Japan’s second- and third-largest carmakers (behind Toyota) are planning to combine forces to develop electric cars in a bid to survive the coming wave of high-tech, low-cost models from China. While Honda has ruled out a capital tie-up with Nissan for now, the endeavour is the closest the two historic rivals have ever come in terms of working together.

From the early days of their establishment, Nissan and Honda have taken very different paths to growth. When Nissan started in 1934, Yoshisuke Aikawa, its low-profile founder, built the group into a massive conglomerate during the prewar period through a series of aggressive acquisitions that were funded by taking its companies public. In the case of Soichiro Honda, the charismatic founder of the eponymous carmaker, he was famous for his go-it-alone strategy and is said to have criticised alliances for slowing things down. Until recently, that DNA has stayed with the company. 

Today, the two corporate cultures remain just as different as in the past, but that does not necessarily mean that the planned partnership is doomed to fail. The reasons that have brought the bitter rivals together are similar, although the degree of desperation may vary. Both Nissan and Honda have stumbled in their traditional approaches to expansion, misreading the pace of market changes in China, and they lack the scale and resources to remain competitive global players. 

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After a quarter of a century, Nissan and its French alliance partner Renault have sharply cut back their capital ties as both companies acknowledged that the partnership would not be enough to survive the industry disruption caused by the shift to electric vehicles and tougher emission rules. Nissan chief executive Makoto Uchida is blunt on the need for new partners, although the company insists its alliance with Renault and Mitsubishi Motors will not be unwound. 

Meanwhile, Honda has recognised that going it alone is no longer a viable strategy, striking a surprise partnership with Sony in 2022 to produce EVs. It also has an alliance with General Motors in fuel-cell vehicles and self-driving technology, but the two carmakers last year scrapped plans to jointly develop affordable EVs owing to differences over cost. 

The setback in the alliance with GM was a blow for Honda’s chief executive Toshihiro Mibe, who declared a phaseout from petrol and diesel cars by 2040 when he assumed the role three years ago. Despite this bold target, Honda has been one of the slowest of the big carmakers to roll out EVs.

Both Japanese carmakers, which each sell about 4mn vehicles a year globally, were caught off-guard by the rise of China’s homegrown EV groups, while Nissan missed out on a boom in hybrid vehicles sales in the US because of a lack of offerings in this category. 

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In a recent FT interview, Uchida said Nissan needed partners such as Honda to acquire scale and share costs. “We need to move drastically faster. I don’t know half a year or a year later what could happen to the industry.” 

That uncertainty has also pushed Germany’s Volkswagen to hold talks with Renault to pool resources to develop lower cost EVs. But while the warnings about survival from the industry’s chief executives are dire, it is hard to judge how serious the moves are until products are launched and cost-benefits become clear.

Honda’s tie-up with Sony generated much excitement when it was announced, but it remains unclear how committed the entertainment group is. People close to Sony suggest the project is aimed at gaining manufacturing knowhow of cars, which could then help Sony to sell its automotive image sensors to Tesla and other EV groups. 

Nissan and Honda began talks in January, and the scope of their co-operation includes software, core EV components and auto-intelligence technology. But, so far, only a non-binding memorandum has been signed, and both CEOs expressed caution on how far the partnership would expand. 

At the end of their joint press conference last month, there was an awkward moment when Uchida and Mibe rejected a request by photographers to shake hands. In many ways, the physical distance between the two CEOs is symbolic of the challenges they face in bridging their differences to ensure that the latest partnership is successful.  

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kana.inagaki@ft.com

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Senate Adopts GOP Budget, Laying the Groundwork to Fund ICE and Reopen DHS

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Senate Adopts GOP Budget, Laying the Groundwork to Fund ICE and Reopen DHS

The Senate early Thursday morning adopted a Republican budget blueprint that would pave the way for a $70 billion increase for immigration enforcement and the eventual reopening of the Department of Homeland Security.

Republicans pushed through the plan on a nearly party-line vote of 50 to 48. It came after an overnight marathon of rapid-fire votes, known as a vote-a-rama, in which the G.O.P. beat back a series of Democratic proposals aimed at addressing the high cost of health care, housing, food and energy. The debate put the two parties’ dueling messages on vivid display six months before the midterm elections.

Republicans, who are using the budget plan to lay the groundwork to eventually push through a filibuster-proof bill providing a multiyear funding stream for President Trump’s immigration crackdown, used the all-night session to highlight their hard-line stance on border security, seeking to portray Democrats as unwilling to safeguard the country.

Democrats tried and failed to add a series of changes aimed at addressing cost-of-living issues, seizing the opportunity to hammer Republicans as out of touch with and unwilling to act on the concerns of everyday Americans.

Here’s what to know about the budget plan and the nocturnal ritual senators engaged in before adopting it.

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The budget blueprint is a crucial piece of Republicans’ plan to fund the Department of Homeland Security and end a shutdown that has lasted for more than two months. After Democrats refused to fund immigration enforcement without new restrictions on agents’ tactics and conduct, the G.O.P. struck a deal with them to pass a spending bill that would fund everything but ICE and the Border Patrol. Republicans said they would fund those agencies through a special budget bill that Democrats could not block.

“We can fix this with Republican votes, and we will,” said Senator Lindsey Graham, Republican of South Carolina and the Budget Committee chairman. “Every Democrat has opposed money for the Border Patrol and ICE at a time of great peril.”

In resorting to a new budget blueprint, Republicans laid the groundwork to deny Democrats a chance to stop the immigration enforcement funding. But they also submitted themselves to a vote-a-rama, in which any senator can propose unlimited changes to such a measure before it is adopted.

The budget measure now goes to the House, which must adopt it before lawmakers in both chambers can draft the legislation funding immigration enforcement. That bill will provide yet another opportunity for a vote-a-rama even closer to the November election.

Democrats took to the floor to criticize Republicans for supercharging funding for federal immigration enforcement rather than moving legislation that would address Americans’ concerns over affordability.

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“This is what Republicans are fighting for,” said Senator Chuck Schumer, Democrat of New York and the Democratic leader. “To maintain two unchecked rogue agencies that are dreaded in all corners of this country instead of reducing your health care costs, your housing costs, your grocery costs, your gas costs.”

Democrats offered a host of amendments along those lines, all of which were defeated by Republicans — and that was the point. The proposals were meant to put the G.O.P. in a tough political spot, showcasing their opposition to helping Americans afford high living costs. Fewer than a handful of G.O.P. senators crossed party lines to support them.

The G.O.P. thwarted an effort by Mr. Schumer to require that the budget measure lower out-of-pocket health care costs for Americans. Two Republicans who are up for re-election this year, Senators Susan Collins of Maine and Dan Sullivan of Alaska, voted with Democrats, but the proposal was still defeated.

Republicans also squelched a move by Senator Ben Ray Lujan, Democrat of New Mexico, to create a fund that would lower grocery costs and reverse cuts to food aid programs that Republicans enacted last year. Ms. Collins and Mr. Sullivan again joined Democrats.

Also defeated by the G.O.P.: a proposal by Senator John Hickenlooper, Democrat of Colorado, to address rising consumer prices brought on by Mr. Trump’s tariffs and the war in Iran; one by Senator Edward J. Markey, Democrat of Massachusetts, to require the budget measure to address rising electricity prices, and another by Mr. Markey to create a fund to bring down housing costs.

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Senator Jon Ossoff, a Democrat who is up for re-election in Georgia, also sought to add language requiring the budget plan to address health insurance companies denying or delaying access to care, but that, too was blocked by Republicans.

While Republicans had fewer proposals for changes to their own budget plan, they also sought to offer measures that would underscore their aggressive stance on immigration enforcement and dare Democrats to vote against them.

Mr. Graham offered an amendment to allocate funds toward a deficit-neutral reserve fund relating to the apprehension and deportation of adult immigrants convicted of rape, murder, or sexual abuse of a minor after illegally entering the United States. It passed unanimously.

Senator Josh Hawley, Republican of Missouri, sought to bar Medicaid payments to Planned Parenthood, which provides abortion and other services, and criticized the organization for providing transgender care to minors. Senator John Kennedy, Republican of Louisiana, also attempted to tack on the G.O.P. voter identification bill, known as the SAVE America Act. Both proposals were blocked when Democrats, joined by a few Republicans, voted to strike them as unrelated to the budget plan.

The Republicans who crossed party lines to oppose their own party’s proposals for new voting requirements were Ms. Collins along with Senators Mitch McConnell of Kentucky, Lisa Murkowski of Alaska and Thom Tillis of North Carolina.

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Ms. Collins and Ms. Murkowski also opposed the effort to block payments to Planned Parenthood.

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Who is John Phelan, the US Navy Secretary fired by Pete Hegseth?

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Who is John Phelan, the US Navy Secretary fired by Pete Hegseth?

The firing of US Navy Secretary John Phelan is the latest in a shakeup of the American military during the war on Iran, now in its eighth week.

The Pentagon said Phelan would leave office immediately.

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“On behalf of the Secretary of War and Deputy Secretary of War, we are grateful to Secretary Phelan for his service to the Department and the United States Navy,” said chief Pentagon spokesperson Sean Parnell. “We wish him well in his future endeavours”.

His firing comes at a critical moment, with US naval forces enforcing a blockade on Iranian ports and ships, and maintaining a heavy presence around the Strait of Hormuz, through which 20 percent of the world’s oil and gas passes during peacetime.

Although the Pentagon gave no official reason for the dismissal, reports indicate the decision was linked to internal disputes, including tensions with Defense Secretary Pete Hegseth.

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Phelan’s removal is part of a broader pattern of dismissals and restructuring within the US military under President Donald Trump’s administration – including during the current war.

So, who is John Phelan, and what impact could his firing have on US military strategy?

Who is John Phelan?

As the US Navy’s top civilian official, Phelan had various responsibilities, including overseeing recruiting, mobilising and organising, as well as construction and repair of ships and military equipment.

He was appointed in 2024 as a political ally of Trump, despite having no prior military or defence leadership experience.

Before entering government, Phelan was a businessman and investment executive, as well as a major Republican donor and fundraiser — a background that is fairly common among Trump appointees and advisers. The US president’s two top diplomatic negotiators, for instance, are Steve Witkoff — a real estate businessman with no prior diplomatic experience – and Trump’s son-in-law, Jared Kushner.

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According to the Reuters news agency, Phelan’s tenure quickly became controversial. He faced criticism for moving too slowly on shipbuilding reforms and for strained relationships with key Pentagon figures, including Hegseth and his deputy, Steve Feinberg.

rump with U.S. Marine Corps Lieutenant General Michael Borgschulte and Secretary of the Navy John Phelan (R) before the game between the Navy Midshipmen and the Army West Point Black Knights at M&T Bank Stadium [File: Tommy Gilligan/Imagn Images/Reuters]

In addition, Phelan was reportedly under an ethics investigation, which may have weakened his standing in the administration.

Navy Undersecretary Hung Cao, who was also reported to have a difficult relationship with Phelan, has become acting secretary. Fifty-four-year-old Cao is a 25-year Navy veteran who previously ran as a Republican candidate for the US Senate and House of Representatives in 2022 and 2024 respectively, but was unsuccessful on both occasions.

Democrats have criticised Phelan’s removal, calling it “troubling”.

“I am concerned it is yet another example of the instability and dysfunction that have come to define the Department of Defense under President Trump and Secretary Hegseth,” said Senator Jack Reed, the top Democrat on the Senate Armed Services Committee.

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Who else has the Trump administration fired since the war with Iran began?

Phelan’s removal is the latest in a series of senior military leaders being fired or are leaving during the US-Israeli war on Iran, in addition to others since Trump was re-elected.

Among the most notable dismissals was Army Chief of Staff General Randy A. George, in the first week of April. George was appointed in 2023 under former US President Joe Biden.

According to reports, Hegseth also fired the head of the Army’s Transformation and Training Command, a unit concerned with modernising the army, and the Army’s chief of chaplains. The Pentagon has not confirmed their dismissal.

Why is Phelan’s dismissal significant?

The 62-year-old’s removal comes during a fragile ceasefire with Iran, as the ⁠⁠US continues to move more naval assets into the region.

The Navy is central to enforcing Trump’s blockade of Iranian ports to restrict Iran’s oil exports and apply economic pressure on Tehran, as the US president looks eager to wrap up the war, which is deeply unpopular to many Americans.

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However, there are no indications that Trump is willing to end the blockade or other naval operations in the Strait of Hormuz, as negotiations between Washington and Tehran have come to a standstill.

Tensions have escalated in recent days after the US military seized an Iranian container ship. The US claimed it was attempting to sail from the Arabian Sea through the Strait of Hormuz to the Iranian port of Bandar Abbas.

Tehran responded by describing the attack and hijack as an act of “piracy”.

Iran has since captured two cargo ships and fired at another.

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Not a Deal-Breaker: White House Downplays Iranian Action Near the Strait

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Not a Deal-Breaker: White House Downplays Iranian Action Near the Strait

Just two weeks ago, President Trump threatened to wipe out Iran’s civilization if it did not open the Strait of Hormuz. Days later, he said any Iranian “who fires at us, or at peaceful vessels, will be BLOWN TO HELL!”

Yet on Wednesday, after Iran seized two ships near the Strait of Hormuz, the White House was quick to argue the action was not a deal breaker for potential peace negotiations.

“These were not U.S. ships,” Karoline Leavitt, the White House press secretary, said on Fox News. “These were not Israeli ships.” Therefore, she explained, the Iranians had not violated a cease-fire with the United States that Mr. Trump has extended indefinitely.

She cautioned the news media against “blowing this out of proportion.”

The surprisingly tolerant tone from the White House suggests Mr. Trump is not eager to reignite a war that he started alongside Israel on Feb. 28 — a war that has proved unpopular with Americans and has gone on longer than he initially estimated.

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The president on Tuesday extended a cease-fire between the United States and Iran that had been set to expire within hours, saying he wanted to give Tehran a chance to come up with a new proposal to end the war.

The American military has displayed its overwhelming might during the war, successfully striking thousands of targets. But it remains unclear whether Mr. Trump will accomplish the political objectives of the war.

The Iranian regime, even after its top leaders were killed, is still intact. Iran has not agreed to Mr. Trump’s demands to turn over its nuclear capabilities to the United States or significantly curtail them. And the Strait of Hormuz, a key passageway for world commerce that was open before the war, remains closed.

Nevertheless, the White House has repeatedly highlighted the military successes on the battlefield as evidence it is winning the war.

“We have completely confused and obliterated their regime,” Ms. Leavitt said on Fox Wednesday. “They are in a very weak position thanks to the actions taken by President Trump and our great United States armed forces, and so we will continue this important mission on our own.”

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The oscillation between threats and a more conciliatory tone has long been one of Mr. Trump’s signature negotiating strategies.

Potential peace talks between the two countries are on hold. Vice President JD Vance had been poised to fly to Islamabad for negotiations. But the trip was postponed until Iran can “come up with a unified proposal,” Mr. Trump said.

The United States recently transmitted a written proposal to the Iranians intended to establish base-line points of agreement that could frame more detailed negotiations. The document covers a broad range of issues, but the core sticking points are the same ones that have bedeviled Western negotiators for more than a decade: the scope of Iran’s uranium enrichment program and the fate of its stockpile of enriched uranium.

Mr. Trump has not spoken publicly about the cease-fire, other than on social media. On Wednesday, he also posted about topics including “my Apprentice Juggernaut” — a reference to his former television show; the Virginia elections, which he called “rigged”; and a new book about Supreme Court Justice Samuel A. Alito Jr.

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