Nissan-Renault, GM chiefs meet amid reports that tie-up talks in trouble

AFP via The Tocqueville Connection ^ | 09/27/2006

[Republicain]

PARIS, Sept 27, 2006 (AFP) - The chief executives of Renault-Nissan and General Motors met in Paris Wednesday and vowed to continue their talks on a three-way deal between the companies despite reports that the negotiations were in trouble.

The groups will continue their feasibility study of a tie-up until mid-October as planned, Renault said in a statement after the meeting on the eve of the Paris Motor Show.

"The teams are carrying out an objective and deep analysis of the potential synergies between the three companies, in particular how such an alliance could generate value for each company," said the statement, which said no further comment on the talks would be made.

Carlos Ghosn, the chief executive of French car group Renault and Japanese manufacturer Nissan, met Rick Wagoner of GM, the world's largest automaker, for the first time on July 14 to discuss a possible three-way alliance between the three groups.

After the meeting the companies announced a 90-day period to study a deal which is set to end October 15.

Press reports in the United States have said that the talks between the groups have run into problems.

The Wall Street Journal reported that GM would ask Renault-Nissan for the payment of several billion dollars, an "equalizing contribution", to recognise the value the group believes it will bring to the partnership,

The Detroit News reported that insiders at Renault-Nissan were frustrated at the slow pace of progress.

First proposed in June by GM's largest private shareholder, Kirk Kerkorian, the alliance was hailed by the market as a way to save the ailing US carmaker.

But there has been speculation that Wagoner is not interested in the deal and is merely going through the motions. A spokesman for GM however said that was not the case.

Many analysts have ruled the alliance out, saying it was more likely the talks would result in a small, narrowly focused effort at collaboration such as those that GM and Ford Motor Co. have to develop six-speed transmissions or GM, DaimlerChrysler and BMW are using to develop hybrids.

Rumours of a potential alliance between GM and Ford Motor Co. or Ford and Renault-Nissan have also been circulating as the top US automakers struggle to downsize amid a steady loss of market share and massive losses.

Renault owns 44.4 percent of Nissan, which in turn owns 15 percent of its French partner.

Together, Renault and Nissan have global sales of over 5.7 million vehicles a year with more than 9.6 percent of the global market and boast collaboration in engineering, manufacturing, sales, information technology and purchasing.

GM, meanwhile, plans to cut 30,000 workers in the United States and to close several plants in the face of stiff competition from Japanese rivals.

[Jagman]

This proposed coupling is a bit like a contest choosing the ugliest pair on the dance floor. Thank God I turned down GM's job offer some year's back...

[Eric in the Ozarks]

Hard to believe, with Nissan and Renault, GM cars could become uglier.