It’s a matter of weeks beforeCorp., SA and Motor Co. Ltd. officially reveal the outcome of 90 days worth of talks about a 3-way global alliance. As the deadline nears, GM Chairman Rick Wagoner sticks with his original stance.
“I don’t want to make a mystery out of it,” he tells Ward’s in a recent interview. “We set up teams to study areas.
“We’ve got experts from GM,and . They’re working through their plans, and let’s say so far the tone of conversations (has been) cordial and constructive. I can speculate on the outcome, but it’s moving along according to schedule.”
However, media reports this week suggest the negotiations have hit a snag as GM executives question the terms of such an alliance. The Wall Street Journal reports GM is prepared to demand a multibillion-dollar payment from Nissan/Renault for its participation in the tie-up.
Wagoner met in Paris this week with Carlos Ghosn, chairman of both Renault and Nissan, to discuss the proposal. Afterward, GM issued a statement today saying talks will continue through mid-October, as planned.
As proposed, the deal calls for Renault and Nissan each to purchase a 10% stake in GM, with Las Vegas billionaire Kirk Kerkorian joining in with his 9.9% ownership of GM shares.
It has been widely speculated such a triumvirate would position Ghosn to take command of GM as well, ousting Wagoner. However, Ghosn says he’s not interested in grabbing the top spot should the three auto makers formally merge.
Asked whether he personally would prefer to keep GM in American hands, Wagoner replies: “My job is to make sure the company continues to be successful. At this point who can say what the future holds? But we’ve put together plans” to go it alone if necessary.
“We’ve taken a lot of tough actions, and a lot of people have contributed to that, so we’re moving on a path that will make GM successful in the future.
“If doing some sort of alliance with Renault or Nissan or somebody else can help us to do it better or faster, we’re open to it. But it wouldn’t be responsible for me not to have a plan to be successful within the current structure we have – and we think we have that. But it doesn’t mean we wouldn’t be open to working with others.”
Wagoner acknowledges he has little power over who owns GM stock. “It’s kind of a free market in securities these days. We have a lot of concentration of our ownership. We have three or four groups that have big blocks of GM stock, so we’re used to dealing with that – that’s the world we live in.”
He says he has met Kerkorian, “but I can’t say I’ve gotten to know him well. He has always, in my conversations, been quite cordial. He’s obviously got a very interesting perspective and set of experiences, and I’ve enjoyed the times I’ve talked with him.”
Wagoner, who learned to speak Portuguese during his tours at GM do Brasil Ltda., was facetiously asked if he planned to learn French and Japanese.
“Um, no,” he laughs. “If I were learning another language now, I’d probably try Chinese, but that sounds like a bridge too far at this age.” The negotiations with Renault and Nissan have been in English, he adds.
WithMotor Corp. moving relentlessly toward surpassing GM as the world’s largest auto maker – possibly by 2008 – can GM stave off the threat?
“We need to run the business the right way,” he says. “If we do that we’ll be competitive for a long, long time. Who wins at the end of the game? I guess that depends on when the game ends, and who executes their strategy better. I think we’ve got a good one, and I think we’re getting some momentum, (but) I think they’re good competitors, too.”
GM has had several alliances with, including the 1982 formation of New United Motor Mfg. Inc. (NUMMI) in Fremont, CA, to produce vehicles for both auto makers under Toyota management.
Asked whether GM has learned anything from the NUMMI tie-up, Wagoner says he thinks so.
“I’m not sure we embraced all of the lessons as soon as we could, but I think on balance we have learned a lot. And I think if you asked them (Toyota) they’d say they learned a lot, too. I think it’s a good example of where both sides benefit.”