DETROIT (Reuters) - The chief executives of General Motors Corp (GM.N) and Renault- Nissan are scheduled to meet on Friday in Detroit, a formal first step in complex talks that could change the face of the global auto industry.þþThe high-profile meeting between Rick Wagoner and Carlos Ghosn comes two weeks after GM's largest individual shareholder, billionaire investor Kirk Kerkorian, went public with his surprise bid to broker a sweeping alliance that would see Renault SA (RENA.PA) and Nissan Motor Co. (7201.T) take a substantial stake in GM.þþBoth companies are headed by Ghosn, who is coming to GM's home city on Friday for meetings at a Nissan facility in the area, according to company officials.þþNeither side would comment on the schedule for Friday's talks, which were confirmed by a person familiar with the situation.þþAnalysts remain divided about whether the tie-up would produce the cost-savings Kerkorian has suggested or threaten to distract both CEOs at crucial times for their respective companies.þþOn Thursday, both sides cautioned that any tie-up would have to be carefully justified, and Wagoner said GM was not relying on a white knight to rescue it from its deep-seated problems.þþGM, the world's largest automaker by sales, lost $10.6 billion in 2005 as it struggled with high labor costs, sluggish sales of profitable sport utility vehicles and loss of U.S. market share to foreign rivals.þþUnder Wagoner, GM has moved to sell assets and slash its hourly work force by 35,000 workers as part of a cost-cutting plan expected to capture about $5 billion in savings this year.þþIn response, GM shares have gained almost 46 percent since the start of the year, bringing Kerkorian closer to profitability on his 9.9 percent stake in the company.þþ``We have a good plan, we're turning the business at a rapid rate,'' Wagoner told reporters in Washington. ``So we're going to be in a position to be a very successful business.''þþGhosn, highly regarded for his success in turning around Nissan, used a series of interviews on Thursday to defuse several areas of potential tension with GM management and workers.þþGhosn told business news channel CNBC he had no intention of taking the top job at GM, a prospect some analysts see as Kerkorian's aim in first approaching Ghosn at a mid-June dinner in Nashville, Tennessee .þþ``I'm not going to run any other third company, and that's not at stake here,'' said Ghosn.þþIn a move that could ease potential union opposition to a deal, Ghosn also suggested Nissan could take over some of the excess production capacity GM is planning to shed in North America.þþThat would cushion the blow as GM looks to close 12 plants and heads into a crucial round of contract talks with the United Auto Workers union where it is expected to seek concessions on costly benefits.þþOn Thursday, Ghosn said he wanted a broad partnership with GM if there was to be any deal at all, saying that would necessitate his companies taking a ``big'' but unspecified stake in GM.þþWagoner said his priority would be to get a ``clear understanding'' of what Ghosn expected from an alliance and convey GM's priorities.þþ``We are always open to ideas to be even more successful, and so it would be crazy for us to reject any good idea, or any thoughtful idea, on how we could be more competitive,'' he said. þþWHEN THE GOING GETS TOUGH?þþSome analysts remained skeptical of the possible alliance a day ahead of the first meeting between the two CEOs.þþ``We believe that an alliance between Renault-Nissan and GM is set to fail the test of generating enough synergies quickly enough to make it worthwhile, particularly for GM,'' Commerzbank analyst Philip Watkins said in a research note.þþBear Stearns analyst Michael Geoghegan said on a conference call on Thursday that ``any synergies would be years off.''þþ``GM finds itself with a number of challenges geographically. And when you compare their footprint to Nissan or Renault, the deal offers very little complementary possibilities,'' he said.þþAnalysts have said GM competes heavily with Renault in Europe and that in the United States, non-unionized Nissan would be wary of retaining unionized GM workers.þþ
Source: NY Times
