GM board favors talks on 3-way alliance with Nissan, Renault

General Motors Corp. has announced that it favored talks on a possible alliance with Nissan Motor Co. of Japan and its French partner, Renault.

A meeting of GM directors on Friday authorized the giant automaker to explore the feasibility of the three-way alliance, said a GM statement seen here on Saturday.

GM has set up a team led by its Chairman and Chief Executive Rick Wagoner to study the teaming up, according to the statement.

Wagoner, the architect of the company's current turnaround plan, has scheduled a meeting, reportedly for July 14, with his counterpart at the Nissan-Renault alliance, Carlos Ghosn.

The statement said GM's board had authorized management "to consider ideas the other two companies have and to weigh the potential benefits of such an alliance."

Nissan and Renault, which holds a controlling 44 percent stake in its Japanese partner, said they looked forward to beginning the talks with GM soon.

The alliance, if achieved, 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 project 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 idled workers under labor agreements.

Wagoner, 53, has wrapped up several initiatives aimed at restoring profit at the world's largest automaker. He is cutting 30,000 union jobs, closing plants and trying to win back buyers with new models.

Source: Xinhua