General Motors' board has tasked its chief financial officer, Fritz Henderson, to lead a high-level executive team to evaluate the recently floated proposal that it form an alliance with Renault of France and Nissan of Japan [WAMN: 04-Jun-06].

Such an alliance could account for almost a quarter of global car sales and GM's latest move is a signal that it is paying more than lip service to the concept of an alliance.

In any event the auto giant has little option but to take the proposal seriously, given that it is enthusiastically backed by its largest single shareholder, the high profile interventionist Kirk Kerkorian.

But the French government, which retains a 15% stake in the formerly state-owned Renault, is less enthused than the cabal of investors and moneymen touting the alliance. In true Gallic fashion, it counsels caution.

Opined industry minister François Loos in a TV interview Tuesday: "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."

Other French politicos also urged restraint. "Renault is a company with an important past. There is a strong relationship with the unions and it has an historic, symbolic character," said a finance ministry spokesperson. It would not look kindly on any increase in share capital that diluted the government's stake in the national icon.

GM, meantime, is coy about the internal task force reportedly assessing the proposal. "I'm sure there are some people starting to take a look-see," said an arch spokeswoman.

Data sourced from Financial Times Online; additional content by WARC staff