Detroit, July 15 (Reuters): General Motors, Renault and Nissan Motor agreed on Friday to review the benefits of a potential alliance that could change the world auto industry.
The decision to devote the next 90 days to a study of the potential savings from a tie-up follows a widely awaited dinner meeting on Friday in Detroit between GM CEO Rick Wagoner and Carlos Ghosn, CEO of both Renault and Nissan.
The meeting came two weeks after GM’s largest individual shareholder, billionaire investor Kirk Kerkorian, went public with his bid to broker a sweeping alliance that would see Renault and Nissan take a substantial stake in GM. The two companies already hold stakes in each other.
Ghosn and Wagoner said working-level talks were expected to focus on areas such as pooling purchasing of parts and sharing vehicle platforms would get underway now, allowing both sides to evaluate the benefits of a deal by October.
“We had a good discussion today, and are looking forward to having our teams work together to explore our ideas,” Wagoner and Ghosn said in a joint statement.
“It is important to let our teams work on this review without distraction and, therefore, we will not be providing further public comments about it at this time.”
Ghosn had said earlier that a deal would only succeed if all sides would benefit. “If not, we will shake hands and return to our battlefield,” he said at a Nissan facility in Detroit.
Analysts fear a tie-up might not produce the cost-savings Kerkorian has suggested and could threaten to distract both CEOs at crucial times for their respective companies.
Wagoner has said this week that GM, the world’s largest automaker by sales, was not relying on a white knight to rescue it from its deep-seated problems.
GM lost $10.6 billion in 2005 as it struggled with high labour costs, sluggish sales of profitable sport utility vehicles and loss of US market share to foreign rivals.
Under Wagoner, GM has moved to sell assets and slash its hourly work force by 35,000 workers as part of a cost-cutting plan expected to capture about $5 billion in savings this year.
In response, GM shares have gained almost 46 per cent since the start of the year, bringing Kerkorian closer to profitability on his 9.9 per cent stake in the company.
