Wagoner confident GM can survive without alliance

Paris, Sept 28 | Updated: Sep 29 2006, 05:30am hrs
General Motor Corp CEO Rick Wagoner said hes absolutely confident the worlds largest automaker can survive without an alliance as his restructuring plan is moving faster than expected.

GM will continue to work according to the 90-day schedule in a thoughtful process to decide whether to join an alliance with Carlos Ghosn, CEO of Renault SA and Nissan Motor Co, Wagoner said on Thursday at the Paris Motor Show. He said a meeting on Wednesday was cordial and wouldnt comment further.

Wagoner is working to complete his plan to cut $9 billion from labour and manufacturing costs by the end of this year, as he also considers a tie-up with Renault and Nissan suggested by billionaire GM investor Kirk Kerkorian. GM will continue to study the proposal until October 15, the three companies said.

Kerkorian sparked the talks in June after Detroit-based General Motors posted its longest streak of quarterly losses since 1992 and saw its US market share decline to 80-year lows. Kerkorian said at the time that Renault and Nissan were interested in buying a significant minority interest in GM.

As the talks wind down, GM is seeking billions of dollars in compensation from the French and Japanese automakers to make an alliance fair to its shareholders, according to people familiar with GMs position. GMs requirement for additional compensation is the latest wrinkle in the discussions, which began in mid-July. Sources said an initial proposal that Boulogne-Billancourt, France-based Renault and Tokyo-based Nissan invest in GM as minority shareholders is unlikely to happen.

Bloomberg