This story was first published in The Straits Times on July 15, 2006.
REUTERS, WASHINGTON POST (DETROIT) - Nissan Motor and Renault chief executive (CEO) Carlos Ghosn on Thursday ruled out running General Motors (GM) in an expanded alliance that is the focus of talks that began yesterday.
“I’m not going to run any other third company and that’s not what’s at stake here,” he told business channel CNBC in an interview on Thursday.
Mr Kirk Kerkorian, GM’s largest individual shareholder with a 9.9 per cent stake and the catalyst for the proposed tie-up, has chafed at GM CEO Rick Wagoner’s management of the struggling carmaker.
Many analysts see Mr Kerkorian’s bid as raising pressure on Mr Wagoner and trying to replace him with Mr Ghosn, who is widely respected for his success in bringing Nissan back from the brink of failure.
But Mr Ghosn ruled out such a move. “I am saying categorically that it is out of the question that I would add on top of my two present responsibilities, being head of Nissan and Renault, another one,” he told CNBC.
When asked if Renault-Nissan would buy a stake in GM, Mr Ghosn said: “It depends on synergies. If the synergies are great, some shareholding is very important. The best way to do it is take a stake in it.
“I suspect the stake would be big,” he added, declining to disclose a specific target.
A source said last week that Mr Ghosn had expressed an interest in buying up to 20 per cent of GM for Nissan and Renault on a combined basis.
The two CEOs were expected to meet in Detroit yesterday. “The first meeting will be mainly one on one at the top level,” Mr Ghosn said. He said the talks, which he expected to conclude by year-end, would identify areas where the companies could cooperate and then quantify the range of potential cost-savings.
He mentioned four areas for consideration: engines and transmissions, vehicle platforms, parts purchasing and research. The car industry is in the midst of a historic period of globalisation. It is in the process of reducing the number of companies, as weak players get absorbed by the stronger ones.
Mr Ghosn’s Renault bought a controlling interest in Nissan in 1999. Germany’s Daimler-Benz merged with Detroit’s Chrysler in 1998, creating DaimlerChrysler.
In the 1990s, Ford Motor purchased Jaguar, Land Rover and Volvo. GM added Fuji Heavy Industry, Suzuki, Isuzu, Saab and Daewoo. GM lost US$10.6 billion (S$16.8 billion) last year, under constant assault by Japanese, European, Korean carmakers.