Nissan Motor of Japan and Renault of France on Monday endorsed a proposal for General Motors (GM) to join their alliance in a move that could create the largest and most powerful automotive group in the world.

In the announcement, Nissan and Renault said they had authorized Carlos Ghosn, chief executive officer of both companies, to explore teaming up with the GM, if the world's largest automaker is interested in the partnership.

Ghosn said earlier that Nissan and Renault were interested in a "significant minority interest" in GM.

Renault and Nissan said the French and Japanese companies' boards had approved the three-way partnership, but they would not proceed unless GM's board and top management "fully support this project."

Meanwhile, the board of Nissan said that the company "should proceed with exploratory discussions concerning a potential alliance" if Detroit-based GM "supports and endorses the proposal made by its shareholders," a reference to investor Kirk Kerkorian, GM's single largest stockholder.

Kerkorian, whose investment company holds a 9.9 percent stake in GM, wrote to GM Chief Executive Officer Rick Wagoner last Friday, floating the idea of a three-way alliance.

It remained unclear what form such an alliance would take, but Kerkorian's letter suggested that the alliance would enable the companies to combine some operations. Nissan, for example, could draw on GM's underused assembly plants in the United States. The companies also could profit by using common components and from sharing engineering and design expertise.

The GM's board held an unscheduled session last Friday to consider the proposal, according to the trade journal Automotive News.

GM issued a statement after the session, saying Kerkorian's request "will be taken under advisement by the GM board of directors." But the statement said GM "has received no offer or proposal from Renault/Nissan."

The project, if materialized, could shake up the global auto industry, in addition to helping pull GM out of a financial limbo, market analysts said.

GM, which lost 10.6 billion U.S. dollars last year, has been saddled with soaring healthcare and retirement costs. Its U.S. market has shrunk and raw materials costs rocketed. Moreover, GM has to continue paying thousands of idle workers under labor agreements.

Source: Xinhua