Report: Ghosn to pitch GM on $10B savings
Paper says chief of Nissan, Renault set to tell CEO Rick Wagoner that GM could see big savings from an alliance, but talks could be in trouble.

NEW YORK (CNNMoney.com) -- Carlos Ghosn was expected to tell General Motors CEO Rick Wagoner that GM could save at least $10 billion a year by entering into an alliance with the two automakers Ghosn heads, Renault and Nissan Motor, according to a published report.

The Detroit News, citing people close to the situation, said Ghosn will make his pitch to Wagoner on Wednesday as they meet at the Paris auto show. Meanwhile, The Wall Street Journal is reporting that GM (Charts) would demand billions from Renault and Nissan (Charts) for agreeing to join the alliance between those two companies.

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The News reports that Wagoner is unlikely to embrace or reject any potential deal with Ghosn until all available options are presented to GM's board of directors next week.

The three companies are near the end of a three-month review period of a possible alliance that began in mid-July. The News reports that Ghosn could end the discussions sooner than the mid-October deadline GM disputes the potential savings of an alliance.

Fritz Henderson, GM's chief financial officer, told analysts at the Paris auto show Tuesday that one of the biggest issues in the talks is whether GM will get a "reasonable share" of the savings produced in a three-way alliance, according to the News report.

The meeting between Wagoner and Ghosn will be their first since July 14, when the companies agreed to the three months of talks. The tension between GM and Renault-Nissan seemed to be have been building ahead of this latest meeting, though.

Patrick Pelata, a Renault executive vice president, told journalists at the auto show Monday that the synergies in the proposed alliance were "obvious." He also suggested that GM was not moving fast enough to keep up with its biggest rival, Toyota Motor (Charts). Pelata said he told Henderson that "if you delay solving your performance issues, it is just going to get worse" in the fight for market share with Toyota.

GM officially declined to comment on Pelata's remarks. But company officials told the News said the statements seemed to violate an agreement between Wagoner and Ghosn to keep the alliance talks quiet until completion.

If talks between GM and Nissan-Renault break down without an agreement, it's possible that Ghosn could look to Ford Motor (Charts) as a possible partner. Ford Chairman Bill Ford Jr. said earlier this summer his company is open to alliances.

But since then it has named Alan Mulally, who had been heading commercial airplanes at Boeing (Charts), as its new CEO. It also announced a more aggressive turnaround plan, including speeding up plans to close plants and offering all of its United Auto Workers union members cash payments to retire or quit.

Many analysts believe that Ford is unlikely to hold talks on a tie up until the new CEO and new turnaround plans have had a chance to show results.

DaimlerChrysler (Charts) has also announced problems recently, including losses at Chrysler Group, its key North American unit. But DaimlerChrysler and Renault Nissan are generally not seen as good a fit as a deal with one of the Detroit-based automakers.


Report: GM may demand billions to join Nissan-Renault alliance

GM-Nissan-Renault talks may run out of gas Top of page

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.