Posted on 07/22/2006 6:07:30 AM PDT by Republicain
Carlos Ghosn, the chief executive of Renault and Nissan, said his companies would only open their alliance to US auto giant General Motors if they think the potential synergies justify the risk.
The three companies have embarked on a 90 day review of the potential benefits of expanding the alliance to include the world's largest but struggling automaker.
"If we come to a conclusion that the synergies are big enough to justify the efforts, then we can go to the second step" of deciding on a framework for an alliance, Ghosn told reporters here.
But the talks will end if the parties decide the risks outweigh the potential benefits, he added.
Ghosn met GM chief executive Rick Wagoner in Detroit last week to discuss a potential three-way alliance.
He again rejected speculation that he has ambitions to replace Wagoner and try to recreate the turnaround he oversaw at once-ailing Nissan.
"What we are considering is not making one company. It is a partnership between three companies," he said.
The alliance would not happen unless the three parties reached a friendly agreement, Ghosn said, adding: "We don't believe any kind of hostile move has any chance of succeeding."
Renault/Nissan entered talks with GM after the US automaker's largest individual shareholder, Kirk Kerkorian, pressured GM management to consider teaming up with the French-Japanese partners. "We don't think we have the right to ignore a major opportunity when this opportunity comes," said Ghosn, who is credited with saving Nissan from near bankruptcy.
He acknowledged the concerns of many industry analysts about whether a deal would benefit Renault and Nissan but said the doubts were less intense than in 1999 when Renault dispatched him to turn around Nissan.
Under an alliance between Renault and Nissan agreed the same year, Renault owns 44.4 percent of Nissan, which in turn owns 15 percent of its French partner.
Ghosn reiterated that his main responsibility was to Nissan and Renault shareholders and that any alliance must enhance value for them.
Yeah, GM, just be more like the French and all your troubles will be over. Look at all those Renaults on the highway. /sarc
Regardless of the number of Renaults on American roads, the fact is that Renault is a profitable company, while GM is headed for bankruptcy. It doesn't matter how many cars you make if you don't make any profit on them.
Exactly. GM can't even *give* their cars away now, since their "employee pricing" has saturated the market.
You do realize that Renault makes a significant percentage of the cars sold in Europe, right - and they sell more cars there than GM and Ford combined.
New accounting methodologies and structures have allowed us to transcend the now obsolete stone age "real profits" business model you subscribe to.
I'm sorry, Elmer, there's no easy way to say this: With your defeatist attitude we can no longer employ you at Enron Inc.
Please clean out your desk immediately.
Gm should ask AMC how well the "aliance" with renault went :p
btw I think GM should drop all its lines except for Cadillac, and Chevorlet.
Whatever Renault manages to do in the European market has little influence over US sales. I dare say the trade barriers worked heavily in Renault's favor on that score. I'm saying that the phrase "French Engineering" is not going to increase sales for GM. Also interesting is that while everyone and their brother (including Yugo!) were able to penetrate the US market, Renault either did not try or tried and failed. They do not have a good track record here. I suppose the only saving grace for Renault is that no matter how hard the UAW bargains, the resulting deal will be better than what Renault has with its workers in France. OTOH, Daimler's Dr. Z has a Q-factor that is through the roof and I expect to see a corresponding bump in US sales of all D-C products. I ROFLAMO with the thought of a Frenchie attempting the same thing.
Build a 350Z with an LS2 in it and I will be the first in line.
Nissan should refrain from bailing out an inefficient featherbedding low productivity perpetuating giant.
The UAW is waiting to entangle and then strangulate Nissan to the level where they got G.M.
G.M.'s future lies in China where they are the leader in making cars.
Where did you get that silly notion? Automobiles don't even show up in the USTR's 2006 National Trade Estimate Report on Foreign Trade Barriers European Union chapter. And besides, GM operates 11 plants in 8 European countries, selling 1.98 million cars and light trucks in 2005 at a market share of 9.4%
I appreciate that you feel the need to make excuses on GM Europe's behalf, but Renault is cleaning its clock.
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