updated 7/5/2006 9:39:34 AM ET 2006-07-05T13:39:34

General Motors has set up a high-level task force to investigate the merits of a deal with Nissan and Renault.

The move is a sign that the U.S. carmaker is seriously considering an invitation to join a three-way alliance that would transform the industry.

Fritz Henderson, GM’s chief financial officer, is leading a project to examine the existing Renault-Nissan alliance and assess the potential benefits to GM if it joined. An alliance could give it almost a quarter of global car sales and an unmatchable research and development budget.

Rick Wagoner, chairman and chief executive, has already had talks with Carlos Ghosn, the chief executive of Nissan and Renault, who on Monday was given power by the carmakers’ Tokyo and Paris-based boards to negotiate a deal. They are due to meet in Detroit this month, according to people familiar with the plan.

So far, details of the proposal are vague, having been discussed only at outline level between the companies and Kirk Kerkorian, who has a 9.9 per cent stake in GM. But people familiar with the talks say Mr. Ghosn indicated to Mr. Kerkorian two weeks ago that Renault and Nissan could buy 20 per cent of GM between them, injecting cash but falling short of a full merger, which would be fraught with difficulties.

GM directors will be pressured on Friday by Jerry York, the board appointee of Mr. Kerkorian, to set up a board committee to consider the alliance. The special board meeting was already planned to discuss the restructuring plan, GM said, but the Renault-Nissan deal has been added to the agenda.

One potential obstacle arose on Tuesday when a French government minister said Renault — privatized in 1996 but still 15 per cent state-controlled — had to take enormous caution over any deal.

François Loos, industry minister, told French television: “This has to be approached with enormous caution. The United States is an immense market, a complicated market and General Motors is in a difficult situation because of problems that have nothing to do with cars.”

A spokesman for the French finance ministry said the state was neither for nor against the idea of a Renault link to GM. But a deal involving a capital increase that diluted the government shareholding would have to be examined particularly closely.

“Renault is a company with an important past. There is a strong relationship with the unions and it has an historic, symbolic character,” he said.

GM would not confirm that Mr. Henderson is leading the project to assess a possible alliance. But it said the chief financial officer typically led such project teams. A spokeswoman said: “I’m sure there are some people starting to take a look-see.”

© The Financial Times Ltd 2013. "FT" and "Financial Times" are trademarks of the Financial Times.


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