General Motors Corp., Renault SA and Nissan Motor Co. agreed on Friday to review the benefits of a potential alliance that could change the world auto industry.
The decision to devote the next 90 days to a study of the potential savings from a tie-up follows a widely awaited dinner meeting on Friday in Detroit between GM CEO Rick Wagoner and Carlos Ghosn, CEO of both Renault and Nissan.
The meeting came two weeks after GM's largest individual shareholder, billionaire investor Kirk Kerkorian, went public with his bid to broker a sweeping alliance that would see Renault and Nissan take a substantial stake in GM. Renault and Nissan already hold stakes in each other.
Ghosn and Wagoner said working-level talks were expected to focus on areas such as pooling purchasing of parts and sharing vehicle platforms would get underway now, allowing both sides to evaluate the benefits of a deal by October.
We had a good discussion today, and are looking forward to having our teams work together to explore our ideas, Wagoner and Ghosn said in a joint statement.
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.
Ghosn told reporters earlier a deal would only succeed if all sides would benefit.
If not, we will shake hands and return to our battlefield, he said at a Nissan facility in Detroit.
Analysts fear a tie-up might not produce the cost-savings Kerkorian has suggested and could threaten to distract both CEOs at crucial times for their respective companies.
Wagoner has said this week that GM, the world's largest automaker by sales, was not relying on a white knight to rescue it from its deep-seated problems.
GM lost $10.6 billion in 2005 as it struggled with high labor costs, sluggish sales of profitable sport utility vehicles and loss of U.S. market share to foreign rivals.
Under Wagoner, GM has moved to sell assets and slash its hourly work force by 35,000 workers as part of a cost-cutting plan expected to capture about $5 billion in savings this year.
In response, GM shares have gained almost 46 percent since the start of the year, bringing Kerkorian closer to profitability on his 9.9 percent stake in the company.
We have a good plan, we're turning the business at a rapid rate, Wagoner told reporters on Thursday. So we're going to be in a position to be a very successful business.
Ghosn, highly regarded for his success in turning around Nissan, Japan's No.2 autos firm and the world No.7, has tried defuse several areas of potential tension with GM management and workers.
Renault is the world's 10th largest automaker.
WHEN THE GOING GETS TOUGH?
Ghosn repeated on Friday he had no intention of taking the top job at GM, a prospect some analysts see as Kerkorian's aim in first
approaching Ghosn at a mid-June dinner.
It's not serious, he said of the suggestion. I'm not interested in his job. I'm interested in and responsible for Nissan and Renault development and results.
In a move that could ease potential union opposition, Ghosn has also suggested Nissan could take over some of the excess production capacity GM is planning to shed in North America.
That would cushion the blow as GM looks to close 12 plants and heads into a crucial round of contract talks with the United Auto Workers union where it is expected to seek concessions on costly benefits.
Ghosn has said he wants a broad partnership with GM if there is to be any deal at all, including a deal where his companies take a big but unspecified stake in GM.
Wagoner said on Thursday he wanted to get a clear understanding of what Ghosn expected and to convey GM's priorities.
Analysts remain skeptical.
We believe an alliance between Renault-Nissan and GM is set to fail the test of generating enough synergies quickly enough to make it worthwhile, particularly for GM, Commerzbank analyst Philip Watkins said in a research note.
Analyst Kevin Tynan of Argus Research agreed: I think Wagoner is going into it a little more skeptical. He and his team are a little bit more confident now in the work they've done and they've said publicly they don't need a distraction right now.