Friday, November 03, 2006

GM said to be wary of alliance

Tuesday, September 26, 2006
GM said to be wary of alliance
U.S. automaker has soured on some global deals, but Renault-Nissan is prodding talks, French exec says.
Micheline Maynard / New York Times

PARIS -- General Motors has raised doubts in its talks with France's Renault and Nissan Motor of Japan that a three-way alliance would yield the benefits that Renault SA and Nissan Motor Co. insist would result from such an agreement, a senior executive at Renault said Monday night.

Patrick Pelata, who is leading the talks for the Renault/Nissan side, said he believed his side had made a strong case in favor of a deal, which he said could help GM fend off a strong challenge from Toyota, which ranks No.2 behind GM worldwide.

But he said he was not sure if the case had been strong enough to convince GM, whose biggest shareholder, Kirk Kerkorian, proposed the arrangement in mid-July.

Pelata, a close associate of Carlos Ghosn, the chief executive of both Renault and Nissan, said members of GM's negotiating team, including its chief financial officer, Frederick A. Henderson, have said they were wary of Renault and Nissan's claims because of GM's experiences in its alliances with global auto companies.

Referring to the hoped-for synergies in those deals, with companies like Suzuki, Fiat and Isuzu, Pelata said that GM officials told the Renault/Nissan side that they had "never seen them come about."

A GM spokesman, Brian Akre, took issue with the notion that GM would be skeptical of a partnership because of past relationships with other automakers.

"We've had multiple alliances, some of which have been very successful and some of which have not," Akre said.

It was the most detail about the talks on a possible deal to date. The discussions began on July 14, after a meeting in Detroit between Rick Wagoner, GM's chief executive, and Ghosn, who led product development at Nissan after the 1999 alliance with Renault.

The two sides agreed to spend 90 days exploring an alliance, which Renault and Nissan say could range from purchasing to manufacturing to product development.

A spokeswoman for Nissan North America, Frederique Le Greves, said that the talks are making progress. "The discussions still go on," she said. "The study will go the 90 days."

Akre added, "We're not commenting on how the meetings are going other than that they're continuing."

The two chief executives are to meet again later this week here, where both will attend the Paris Motor Show. Neither side has confirmed the exact date of the meeting. Some analysts theorize the meeting could provide a graceful way for the two chief executives to end the discussions, which Ghosn has said would not proceed if GM did not wish them to continue.

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