GM Agrees to Joint Study With Renault, Nissan

18 July 2006

General Motors chairman/ceo Rick Wagoner and Carlos Ghosn, his opposite number both at Renault and Nissan, met one-to-one behind closed doors late Friday evening.

It was announced after the meeting that their companies are to participate in a ninety-day study as a prelude to a possible three-way global alliance. However, the duo made it clear that all future discussions will be conducted beneath the wraps.

"It is important to let our teams work on this review without distraction, and, therefore, we will not be providing further public comments about it at this time," read a joint statement.

However, the godfather of the proposed alliance, GM's largest shareholder Kirk Kerkorian, is not a happy man. He harbors fears that Wagoner - whose career is at risk should an alliance materialize - will pay only lip service to the concept. Moreover, Wagoner's own GM recovery plan could well be sacrificed on the altar of a three-way deal.

Kerkorian is therefore urging GM's board not to leave the alliance evaluation solely in Wagoner's hands but to set-up a board committee for that purpose.

An alliance would likely result in Renault and Nissan both taking a 10% stake in the US automaker - currently the globe's largest by sales volume.

Data sourced from Wall Street Journal Online; additional content by WARC staff