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Last Updated: Wednesday, 27 September 2006, 18:11 GMT 19:11 UK
Car bosses pledge to keep talking
Rick Wagoner (left), GM chief executive and Carlos Ghosn, chief executive of Renault and Nissan
The two bosses' decisions could reshape the global car industry
The bosses of General Motors (GM) and Renault and Nissan have pledged to continue talks about the trio forming a global partnership.

Their comments came after GM's Rick Wagoner met with Renault and Nissan boss Carlos Ghosn on the sidelines of the Paris Motor Show.

Both sides are now due to decide by next month whether to proceed to full-scale talks on the partnership.

Reports have suggested GM is seeking a one-off payment to join the venture.

We have always been sceptical that such a large scale alliance really held short-term benefits
Mark Oline, Fitch Ratings

"The extension of the alliance to an American partner makes sense," said Mr Ghosn after the meeting.

"There are a lot of potential synergies we can unlock,"

It was the duo's first face-to-face meeting since July when they held exploratory discussions in Detroit, GM's headquarters.

Different visions

Co-operation in areas such as manufacturing and purchasing could help struggling GM reduce costs and help both firms to compete more aggressively against successful rivals such as Toyota.

But there is growing speculation that the two sides remain far apart: both on their preconditions for an alliance and on how they envisage it taking shape.

General Motors vehicles await sale at a GM dealership
Will GM decide to go it alone?

Industry experts believe Mr Ghosn wants a financial and industrial alliance, with Renault-Nissan and GM acquiring stakes in each other.

GM is thought to be less keen on this idea, with the Wall Street Journal Europe reporting that it would expect Renault-Nissan to pay its counterpart to join the alliance.

The financial inducement, the newspaper said, would be a reflection of GM's global reach and its strength in the US.

One analyst said GM was increasingly confident that its own turnaround plan, designed to reverse its sales slump in the US, would bear fruit and it was not prepared to do anything to compromise that.

"We have always been sceptical that such a large scale alliance really held short-term benefits," said Mark Oline, managing director of the credit ratings firm Fitch Ratings.

"GM's focus is really on turning around its North American operations and an alliance doesn't bring very much to the table."

Renault owns 44.4% of Nissan, which in turn owns 15% of its French partner.


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