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Last Updated: Thursday, 28 September 2006, 10:30 GMT 11:30 UK
Doubts persist as car pact talks continue
By Jorn Madslien
Business reporter, BBC News, Paris Motor Show

Bent forward as in prayer, fidgeting with their Blackberries, the men in charge of the world's largest car company looked nervous as they prepared to face the media at the Paris Motor Show.

Bob Lutz and Rick Wagoner
GM's bosses are under immense pressure

Vice Chairman Bob Lutz and Chairman and Chief Executive Rick Wagoner have already cut costs to the tune of $9bn, yet they know the road ahead to prevent General Motors from imploding remains long and hard.

Wednesday's talks with Carlos Ghosn, the chief executive of alliance partners Renault and Nissan, failed to bring about a widely-hoped-for announcement of a GM link-up with the two, which would have created a three-way alliance.

"We're going to continue to focus on [cutting costs] by cooperating with Renault Nissan - or with other people," Mr Wagoner told a scrum of news-hungry journalists, following the unveiling of its latest models.

The cautious talk of potential link-ups with car makers other than Renault Nissan was mirrored by Mr Ghosn, who on Wednesday hinted that other North American alliance partners - most likely Ford - would be sought if talks with GM were to come to nought, according to the industry magazine Automotive News Europe.

And there have even been speculation that Toyota might join the scrum by offering GM an alliance proposal of its own.

Prolonged discussions

Mr Wagoner said a decision on its talks with Mr Ghosn would be taken by the middle of next month.

Chevrolet WTCC Ultra
Flexing muscles and growling may not do much to solve GM's problems

The ongoing talks, he insisted, were "professional and very amicable".

"We're addressing fundamental issues," he said.

"You will see a conclusion, which could range from continued studies to a decision to proceed or a decision not to proceed."

This kind of suggestion that there is still a long way to go is unlikely to please Renault-Nissan executives, some of whom have reportedly criticised GM for dragging its heels during discussions.

One possible way forward for the alliance talks could involve the companies swapping shares in each others' companies. Alternatively, some suggest Renault Nissan could pay to acquire a stake in GM.

"Our primary focus has to be what's right for General Motors, and to get fair value from any cooperation," said Mr Wagoner,

No reliance

The most spectacular GM vehicle on display was its Chevrolet WTCC Ultra concept, a brutal-looking muscle car aimed at the European market.

But for GM, flexing its muscles and growling will hardly be enough to get it out of trouble.

Last year, the company lost more than $10bn, and it has spent much time and money this year slicing back its organisation, cutting costs and jobs.

Rick Wagoner
Rick Wagoner is staying tight-lipped about the prospects for a deal

Many working under Mr Ghosn believe GM desperately needs a partner to beat off Toyota, the Japanese automotive giant predicted to overtake GM in terms of sales in the US within years - if not months.

Nevertheless, Mr Wagoner remained adamant that GM is far from reliant on a deal with Mr Ghosn.

"We have made it very clear that we have a pretty detailed turnaround and growth strategy for GM which is working very well and that is what is going to save the company and make the company prosperous," he said.

Mr Ghosn, meanwhile, is philosophical, indicating that any deal depends on what "synergies are on the table".

"We will be make our decision on numbers, we will make our decision on facts," he said in an interview with the BBC.

"If the answer is no, then it will be business as usual."




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