Carlos Ghosn, CEO of Renault and Nissan, said a proposed alliance with General Motors Corp. offers a “great opportunity” for his two companies and should be cemented by their acquisition of a stake in the U.S. automaker.
Speaking to various media outlets on the eve of a planned face-to-face meeting with GM’s chief executive Rick Wagoner, Ghosn also said a three-way business alliance should be comprehensive and involve sharing of resources, but would only work with the support of GM’s management.
In an interview with The Wall Street Journal, Ghosn said he won’t necessarily play a direct role in GM management as some have speculated, adding that ideas about how a three-way alliance would be led are premature.
“I don’t want to talk about how to unlock the value until we define what’s at stake,” Ghosn told the newspaper.
Under a tie-up, Nissan and Renault could take a stake in GM as all three want to get savings by sharing the costs of developing new products and buying components, and allow a financial return on GM’s recovery. A person familiar with the situation said earlier this month Ghosn had expressed interest in a stake of up to 20 percent for the combined companies.
Ghosn gave no such details in his interviews, but told the Journal “you need some kind of a shareholding to make sure you are serious about [a partnership],” noting that partners in a deal can benefit from a successful alliance if there is a cross company ownership.
However, Ghosn dismissed the idea of a hostile deal for control of GM. Any alliance with GM should preserve the separate identities of the partners, he told the newspaper.
“You don’t want to give the impression that this company is under the control of another company. That is what I want to avoid,” he said. Asked by the Journal if he thought a deal with GM could happen he replied after a long pause: “I think it may.”
The proposal of an alliance between the three automakers first surfaced last month in regulatory filings by Tracinda Corp., a major GM shareholder which is controlled by billionaire investor Kirk Kerkorian.
Directors of Renault SA of France and Nissan Motor Co. of Japan agreed June 30 to open discussions on bringing Detroit-based GM into their existing alliance. A week later, GM’s board also gave the green light for talks led by Wagoner.
Wagoner said Thursday that he remained open to considering an alliance with Renault and Nissan. A GM spokeswoman confirmed Thursday that the two would begin “exploratory discussions” on Friday, but declined to say where.
Wagoner, after testifying before a U.S. Senate committee in Washington on ways to streamline health care costs and improve quality, said he couldn’t commit to a timeline for studying the alliance.
“Everybody would want to move to a yes or no decision promptly,” Wagoner said.
In Washington on Thursday, Wagoner reiterated that while the company is open to a potential alliance with the companies, he stressed the company did not want to divert attention from its turnaround plan.
“We cannot divert attention from executing our turnaround plan,” Wagoner said.
But he said a relatively small group of GM employees could look at an alliance and see if there were benefits and synergies.
GM, which lost $10.6 billion last year and is in the midst of a major downsizing, has a lot on its plate, Wagoner said, including completing the sale of a 51 percent stake in its financial arm, General Motors Acceptance Corp., and forging a labor cost reduction deal involving Delphi Corp. and its unions.
“We’re very willing to sit down and talk about the full range of options with Mr. Ghosn,” Wagoner said, adding that he hopes to get a clear vision of what both sides are looking for and what benefits could come to the companies and their shareholders.
In an interview published in French newspaper Le Monde’s Thursday evening edition Ghosn said it was too early to say for sure whether the likely benefits of an alliance with GM would outweigh the risks.
He said the failure of GM’s previous alliance with Italy’s Fiat SPA makes GM naturally skeptical. But he said the thinking at Renault and Nissan is influenced by the success of the seven-year-partnership between the French and Japanese carmakers.
“We have to get past the optimism on one side, and the pessimism on the other, and objectively evaluate the potential of a tie-up,” Ghosn said.
But he added: “If we carry out this project with the same spirit in which we worked with Nissan, there’s no reason why it shouldn’t work.”