Toyota said to mull GM alliance
Report: Japanese automaker may foil Renault-Nissan with a surprise bid to hook up with GM.
NEW YORK (CNNMoney.com) -- Toyota's top execs are discussing putting out feelers to GM in a bid to form an alliance and head off rivals Nissan and Renault, a news report said Sunday.
Business Week magazine, quoting people with knowledge of the Japanese automaker's plans, said the company is mulling its options and considering different plans that could be proposed to General Motors (Charts), the world's largest but deeply troubled automaker.
The story quoted one Toyota (Charts) source saying that the company has "war-gamed" a way to help GM, since despite its rapid growth, much of that at the expense of General Motors, Toyota is concerned about the political and social backlash if GM falls apart.
It also said that an equity link, where Toyota and GM would buy stakes in each other, was unlikely.
The report noted that GM execs have said they haven't heard anything from the Japanese automaker, and it quoted Toyota spokesman Steven Curtis as saying any talk of an offer was "pure speculation."
GM spokeswoman Toni Simonetti called the report "speculative" and said GM has not been approached by anyone from Toyota regarding working together beyond what the companies are already doing.
Toyota and GM operate a joint assembly plant in California. Simonetti declined further comment.
The report comes two days after GM CEO Rick Wagoner and Nissan-Renault CEO Carlos Ghosn said they will work on a confidential review of the potential benefits of an alliance between GM and those two automakers.
The review is expected to take about 90 days, the companies said after the CEOs met in Detroit for what the companies called an "exploratory discussion" about a possible alliance. (Full story).
The alliance between GM and Nissan-Renault was first suggested by Kirk Kerkorian, GM's largest individual shareholder who owns a 9.9 percent stake.
A number of industry analysts said Friday they think that a GM-Nissan-Renault alliance was unlikely. But they also said there are risks for GM in just holding talks with its potential partners, no matter what direction they go. (Full story).
GM, the world's largest automaker, is already taking steps to get back on track after it lost $10.6 billion last year. The company is cutting 30,000 hourly workers, closing a dozen plants and facilities and selling a stake in its GMAC finance unit.
But perhaps the biggest challenge facing GM is its need to develop new cars and light trucks that will attract buyers without resorting to big incentives. GM has seen its share of the U.S. market slide in recent years, as overseas automakers like Toyota, Honda and Nissan have gained.
Some kind of broader pact with Toyota could prove attractive to Wagoner, GM's CEO, as a possible foil to Ghosn and his two automakers.
David Cole, head of the Center for Automotive Research, said Sunday that he wouldn't be surprised if Toyota was interested in more links with GM, as well as in blocking a GM-Nissan-Renault alliance.
"It depends on the nature of the agreement, what the consideration is on both sides," said Cole. "I know the GM people have high regard for Toyota, and that Toyota people also have high regard for GM."
But Cole noted that it wasn't likely Toyota would make any broad move quickly. "Toyota moves very slowly with any kind of alliances," he said. "For Toyota, the foundation for whatever they do is already having a very deep relationship with the other company. But a closer partnership with GM would not be a difficult thing because they have a pretty good working relationship already."
He said the two companies have been successful with their California venture, which makes the Pontiac Vibe, the Toyota Corolla and Toyota Tundra pickup.
Other analysts are skeptical about GM's enthusiasm for an alliance with Nissan and Renault.
"GM is a company that wants to get past this blind date they were set up on by Uncle Kirk and concentrate on their turnaround plan," Kevin Tynan, auto analyst for Argus Research, told CNNMoney.com Friday.
"There's obviously a myriad of issues there for them to concentrate on, and there's a lot more potential there [in the internal issues] than in an alliance," Tynan said.
Meanwhile, Ghosn said last week he doesn't want the top job at GM even if an alliance is struck between GM and Nissan-Renault. (Full story).
Ghosn, 52, was executive vice president of Renault for just over two years when he was named chief operating officer of Nissan in June 1999 at the start of the Nissan-Renault alliance. He was named CEO in of Nissan two years later, and is widely credited with pulling the automaker back from the brink of bankruptcy. He was named Renault CEO in April 2005.
-- CNNMoney.com's Peter Valdes-Dapena contributed to this report.
Related: More trouble for Detroit
Related: GM running out of gas