PARIS – Any deal with General Motors Corp (GM) needs to boost the existing alliance between Renault and its partner Nissan and would only make sense if they took a stake in GM, Carlos Ghosn was quoted as saying on Thursday.
Click here to visit FOXBusiness.com's Autos Center.
On the eve of meeting GM chief executive Rick Wagoner in Detroit, the chief executive of both Renault and Nissan gave an interview to France's Le Monde.
Ghosn said there was no point in entering detailed negotiations if the willingness to look seriously at a deal was not there on both sides. "Without any hunger, (talks) would be a waste of time," he was quoted as saying.
"We have to overcome the optimism of some and the skepticism of others in order to evaluate objectively the potential of an alliance," Ghosn was quoted as saying.
The board of General Motors last week approved exploratory talks on a three-way alliance with Nissan and Renault, increasing the pressure on Wagoner at a crucial point in the automaker's turnaround.
A tie-up is being pushed by billionaire investor Kirk Kerkorian, whose Tracinda Corp has a stake of some 10 percent in GM. Kerkorian disagrees with the GM board which entrusted Wagoner with dealing with Ghosn instead of letting the talks be conducted by a board committee with access to outside advisors.
The boards of Nissan and Renault, which has a 44 percent controlling stake in Nissan, have said they looked forward to beginning the talks with GM.
COST SHARING
Under a tie-up, Nissan and Renault could take a stake in GM as all three want to get savings by sharing the costs of developing new products and buying components, and allow a financial return on GM's recovery.
A person familiar with the situation said earlier this month Ghosn had expressed interest in a stake of up to 20 percent for the combined companies.
In the Le Monde interview Ghosn gave no such details.
"There is no reason it cannot work if we undertake this project in the same spirit as that we worked on with Nissan," he added. Whatever happened his priority was to meet the goals he has already set for Renault and Nissan.
"The only valid question is whether an alliance with GM could accelerate, strengthen or increase the success of the plans underway at Renault and Nissan," he was quoted as saying.
"I will not do anything that is likely to threaten them or slow down their implementation," he added.
Wagoner said on Tuesday the proposed alliance was an "interesting idea" that would get full consideration from GM.
Analysts had expected Wagoner to oppose the potential tie-up, saying it could endanger or end his tenure at the head of the world's largest automaker by sales.
GM lost $10.6 billion in 2005 as it struggled with high labor costs, sluggish sales of sport utility vehicles and loss of U.S. market share to foreign rivals.
Sector analysts said the GM alliance talks could distract Renault and Nissan management from addressing their own problems.
Nissan's global output fell 11 percent in the first five months from the year before and sales are particularly flagging in the United States, where it makes the majority of its profits.
Renault is at the start of an ambitious plan to boost sales and profits up to 2009 with the launch of 27 models.
Get all the stories you need-to-know from the most powerful name in news delivered first thing every morning to your inbox