Talks to Continue on Auto Alliance
General Motors Corp., Nissan Motor Co. and Renault will continue talks as planned until mid-October on a possible global alliance, the automakers said Wednesday after their chief executives met.
GM’s Rick Wagoner met on the eve of the Paris Motor Show with Carlos Ghosn, who heads both Nissan of Japan and its controlling partner, Renault of France.
“It’s fair to say that we agreed that Oct. 15 is the final date before acknowledging any alliance,” Ghosn said prior to a speech at an industry conference.
Ghosn added that he expected to use the full amount of time for the discussions.
Wednesday’s meeting was the first between the two executives since they huddled in mid-July in Detroit and agreed to a 90-day study of a potential alliance.
Analysts have become increasingly skeptical that GM will agree to the kind of sweeping global deal that Ghosn has outlined because of the U.S. automaker’s progress in recent months in cutting costs as it aims to return to profitability.
In a joint statement, GM, Nissan and Renault said executive teams at all three companies were still working on a study of “how an alliance could generate significant shareholder value for each company.”
No other details were given, and both sides said they would not comment further.
The alliance talks were urged by Kirk Kerkorian, the billionaire investor whose investment firm, Tracinda Corp. of Beverly Hills, holds a 9.9% stake in GM.
Kerkorian and his advisor Jerry York, a member of GM’s board, met with Ghosn this summer.
Tracinda had no comment on the developing talks.
Wagoner and Ghosn met at an undisclosed location. The Paris show is one of the auto industry’s major annual events.
GM, which lost $10.6 billion last year, has seen its U.S. market share fall to about 25%, about half its peak during the 1970s.
Like its fellow automakers in Detroit, GM has been hurt by its reliance on pickup trucks and sport utility vehicles at a time when U.S. motorists have begun to favor more fuel-efficient passenger cars.
Thomas Leritz, a portfolio manager with Argent Capital Management, said GM needed an alliance, given the growing pressure from Toyota Motor Corp. and Honda Motor Co. of Japan.
“When you have an industry that’s coming under pressure, the weaker players can combine to create better economies of scale, to lower overall costs to compete better with the more dominant players like Toyota,” he said.
GM rival Ford Motor Co., working to recover from a $1.4-billion first-half loss, is “looking at all manner of things” regarding potential alliances, the company’s finance chief said.
“We’ve thought about a lot of things,” Don Leclair told Bloomberg News in Paris, where he is attending the show. “We’ve concluded for now that what we want to focus on is fixing our business.”
He declined to say whether Ford was interested in allying with Nissan and Renault if they did not join with GM.
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Reuters and Bloomberg News were used in compiling this report.
