Nissan will fall victim to a cost-cutting “carnage” as it joins forces with Japanese rivals Hondaformer Nissan CEO Carlos Ghosn told CNBC on Tuesday.

“I think Honda will be in charge without a doubt, which is very sad considering he ran Nissan for 19 years (and) brought Nissan to the top of the industry to see them fall victim to carnage because there is a complete duplication between Nissan and Honda,” he told CNBC’s “Squawk Box Europe.”

Ghosn, who once led three automakers under the Nissan-Renault-Mitsubishi alliance, has been living in Lebanon since his arrest in Japan in November 2018, fleeing trial on financial crimes charges. He denies wrongdoing.

“There is practically no complementarity here, which means that if they want to achieve synergies, then perhaps by cutting costs, duplicating plans, duplicating technology, and we know exactly who will pay the price for this. It’s running.” “The smaller partner will be Nissan,” said Ghosn.

Nissan had greater complementarity with France RenaultGhosn appreciated and referred to a long-standing partnership that has largely been wound up.

Speculation about a possible merger between Honda and Nissan began earlier this month, and the two companies confirmed the official start of business integration talks at a press conference on Monday. Under current proposals, a holding company would act as the parent of both companies and be listed on the Tokyo Stock Exchange, with Honda – whose market capitalization is about four times that of Nissan – nominating most of the new company’s board members. Nissan’s strategic partner Mitsubishi is also in talks about joining the group.

A Nissan-Honda group with sales of $54 billion would overtake South Korea Hyundai to become the third largest automobile manufacturer in the world after Japan Toyota and Germany Volkswagen. The integrated group would also represent a milestone in the consolidation of the auto industry that has long been anticipated both in Japan and globally as companies struggle to meet the costs of developing electric vehicles and autonomous driving technology.

Honda and Nissan executives stressed Monday that a combined company would be able to share the information and resources needed to compete and achieve economies of scale in the transition to electric vehicles, boosting operating profit to an expected $3 Trillion yen (US$19.1 billion) could be increased in the long term.

Nissan launches the ambitious merger and at the same time takes a profound step The restructuring, announced in November, will reduce global production capacity by a fifth and cut 9,000 jobs.

Honda CEO Toshihiro Mibe acknowledged Monday that some shareholders might feel his company was supporting struggling Nissan as part of the deal, but stressed that corporate integration talks “would not come to fruition.” , if the two car manufacturers could not survive on their own.

Still, Ghosn told CNBC that the merger plan suggests that “Nissan is panicking and looking for someone to bail them out of the situation because they are unable to find the solution themselves.”

He expressed “big doubts” that Nissan’s turnaround will be successful, without giving details.

Kei Okamura, SVP and portfolio manager of Neuberger Berman, shared the view that details of the merger plan still need to be clarified.

“If you’re an investor, think about the three to five earnings prospects. What was announced (Monday) was the short-term perspective, that is, the schedule and the long-term vision. The only question is how. “Will this combined company get there, and there’s still a lot of uncertainty ahead,” Okamura told CNBC’s “Street Signs Asia” on Tuesday.

“Post-merger integration will be absolutely essential…if these companies are unable to truly fully integrate in terms of the people, the assets and of course the culture, these deals have the potential to unravel , and we.” “I have to keep in mind that this deal may not go through if (Nissan) doesn’t follow through on its turnaround program,” Okamura added.

Nissan declined to comment for this story beyond its statement Monday. Honda did not immediately respond to a CNBC request for comment.

Treasury yields fell on Tuesday in a holiday-shortened trading session ahead of the Christmas break.

The 10-year Treasury yield was 12 basis points lower at 4.586%, while the 2-year Treasury yield fell 9 basis points to 4.340%.

One basis point is equal to 0.01%. Yields move in the opposite direction to prices.

Tuesday is expected to be a subdued day for U.S. financial markets, with stock trading closing as early as 1 p.m. ET. The bond market ceases operations at 2 p.m

The markets will be closed on Wednesday for the Christmas holidays.

Economic data to be released on Tuesday includes the Philadelphia Fed’s non-manufacturing survey and the Richmond Fed’s December survey.

WOKING, England – At McLaren’s massive technology center, artificial intelligence isn’t being shouted from the rooftops.

However, the 60-year-old motorsports giant is an enthusiastic user of the technology behind the scenes.

At the McLaren Technology Center (MTC) in Woking, England, the company explained how it is using AI to improve its chances on the Formula 1 circuit.

“We are an organization that has a long history of using traditional machine learning technology products,” said Dan Keyworth, McLaren’s director of business technology, in a press conference at MTC in October.

Through machine learning, Keyworth says McLaren is able to make its decisions based on probabilities, which in turn helps it train its AI models.

The racing company showed numerous examples of technological innovation at the MTC. They range from real-time data monitoring in the secret mission control room to the use of “digital twins” (3D digital versions of physical objects) of real cars, allowing teams to model the conditions under which actual vehicles must operate.

According to Keyworth, there are three main areas where McLaren is using AI extensively: improving vehicle performance, day-to-day operations and commercialization.

He added that generative AI tools offer new opportunities for F1 teams, including the ability to run detailed simulations of specific possibilities that might arise during races.

This can range from determining the ideal amount of time a car should spend on pit stops to deciding which tires to put on the vehicle when replacing an old set.

“From a generative perspective, AI allows us to actually run through more of these actual scenarios and ask, ‘What’s going to happen?'” Keyworth said.

Some of these scenarios began to produce “pretty accurate” results – to an “almost frightening” extent, he added.

Technology has long been the key to success in motorsport – and not just for McLaren.

Various F1 teams have been using modern technological advances for years – from cloud computing to AI and machine learning.

Aston Martin Aramco, for example, is promoting the use of so-called “data lakes” – massive data storage centers – and machine learning technology to learn from massive amounts of data, predict patterns and improve decision-making.

Aston Martin Aramco chief information officer Clare Lansley says machine learning algorithms can bring together data on tires, weather and track conditions and use predictive analytics to optimize decisions.

In a blog post in April, she said the speed at which these developments are progressing is “truly impressive.”

“By introducing this technology, we will be able to free up several engineers to focus more on vehicle performance,” she noted.

Another F1 team using AI to improve its on-track performance and strategy is Visa Cash App RB, owned by Red Bull.

RB CEO Peter Bayer said earlier this year that the Italian F1 team was using AI to compete at “hundred-thousandths of a second.”

Guillaume Dezoteux, head of vehicle performance at RB, said at an event with the company’s software partner Epicor at its factory in Faenza, Italy, that AI can help inform teams when planning because “it means you don’t have to run . “100 simulations.”

Keyworth noted that none of the innovation taking place at McLaren would be possible without the help of IT tools and equipment from partners such as… Cisco And Google.

“Connectivity is probably the lifeblood of the sport,” he said ahead of the Mexico City Grand Prix race on October 27. “Without them, nothing starts. No car can be safe on the track.”

A key component behind McLaren’s ability to keep data flowing to its teams in real time is its so-called mobile data centers.

These are miniature server rooms that are flown to various races around the world to keep the digital components of the operation online consistently.

“These mobile data centers will be flown to each race location alongside the famous F1 cars and brought online remotely to enable real-time storage and data processing,” Chintan Patel, Cisco’s chief technology officer for the UK and Ireland, told CNBC from the MTC.

Another area where AI brings benefits is commercialization, according to McLaren’s Keyworth.

For fans and partners, he said, McLaren is increasingly trying to “enrich the journey and the experience and make our fans feel more connected.”

With AI, McLaren can better engage fans in emerging Formula 1 markets such as the US, where the sport is becoming increasingly popular – for example by personalizing information for fans at certain times of day.

When it comes to using AI in business, Keyworth says the company sees the main area of ​​improvement as “making everyone’s lives richer, easier, faster and more efficient.”

“It’s not a labor replacement – it’s a ‘laborious’ replacement,” he said. “You want to empower your team to do the things you hired them to do—not to handle the overhead that comes with their role.”

Shares of the Japanese automaker Honda were on track for their best day in 16 years after the company said Monday it would buy back up to 1.1 trillion yen ($7 billion) of its shares as part of merger negotiations Nissan.

Nissan and Honda said they had begun formal merger negotiations that could catapult them into the world’s third-largest automaker by sales.

Honda also said it would buy back 24% of issued shares by December 23 next year. Its shares were recently up 15.51% and would have their best day since October 2008 if the gains continue. Nissan shares fell over 1%.

The Honda-Nissan deal will focus on sharing knowledge and resources, achieving economies of scale and creating synergies, said Honda CEO Toshihiro Mibe. A holding company is established as the parent company for Honda and Nissan and is listed on the Tokyo Stock Exchange.

“These two companies operate in the same market and have a very similar brand image and very similar products,” Hakan Dogu, chairman of Alagan Mobility Solutions, told CNBC on Tuesday.

“The new management faces a major challenge to differentiate the product range and expand the business,” he added.

The talks are scheduled to conclude in June 2025.

Nissan’s strategic partner Mitsubishi has been given the opportunity to join the new group and is expected to make a decision by the end of January 2025.

Honda reported operating profit of 1.382 trillion yen for the full year ended March 2024, while Nissan posted 568.7 billion yen. The automakers would have a combined value of nearly $54 billion, with Honda’s market cap contributing the larger share of $43 billion.

Analysts believe the possible merger is due to Nissan’s financial difficulties and the restructuring of its long-standing partnership with France’s Renault.

In its most recent quarterly report, Nissan announced plans to cut 9,000 jobs and reduce its global production capacity by 20%.

—CNBC’s Jenni Reid contributed to this report.

Asia-Pacific markets opened higher on Christmas Eve after key U.S. benchmarks rose overnight thanks to gains in technology stocks.

Japan Nikkei 225 and Topix opened almost flat as investors awaited minutes from the Bank of Japan’s October meeting.

South Korea Kospi rose 0.31%, while the Kosdaq gained 0.72%.

South Korea’s consumer confidence has fallen to its lowest level in more than two years. The country’s consumer sentiment index fell more than 12 points from November to 88.4 in December, falling below the 100-point mark that separates optimism from pessimism, a survey released by the Bank of Korea showed.

Hong Kong’s Hang Seng index futures were at 19,924, above the HSI’s previous close of 19,883.13.

Australia’s S&P/ASX 200 moved slightly around the zero line in a shortened trading day.

Dealers will be monitoring any developments surrounding the planned merger of Japanese automakers Nissan and Honda, which announced on Monday that they had begun formal merger negotiations to pave the way for the creation of the world’s third-largest automaker by sales. The talks are scheduled to conclude in June 2025.

Overnight, stocks in the US rose as strength in technology stocks benefited the broader market.

The S&P 500 gained 0.73% to 5,974.07. The tech-heavy Nasdaq Composite rose 0.98% to 19,764.89, with Tesla and Meta Platforms gaining more than 2% and Nvidia gaining more than 3%.

The Dow Jones Industrial Average erased earlier losses to end the day 66.69 points higher, or 0.16%, at 42,906.95.

Trading was weak on Monday and is expected to remain subdued throughout the week. The New York Stock Exchange closes early Tuesday on Christmas Eve at 1:00 p.m. ET and the market will be closed on Christmas Day.

—CNBC’s Yun Li contributed to this report.