US: Ford alliance would make more sense
A possible partnership between the Renault-Nissan alliance and Ford would make more sense and deliver more synergy benefits than a Renault-Nissan tie-up with General Motors, analysts have said on Thursday.
"A deal with Ford would make far more sense than one with General Motors," Kepler Equities analyst Patrice Solaro told Reuters.
"Not only are the synergies between Ford and Nissan on the North American market larger, but in Europe a deal with Ford would also generate more opportunities than with GM," he said, adding: "Ford in Europe is also Jaguar, Volvo, Land Rover, Aston Martin."
Reuters noted that both Renault and Ford have declined comment on media reports that the latter's chairman and chief executive Bill Ford had phoned Carlos Ghosn, CEO of Renault and Nissan, to propose talks in case Ghosn's discussions with GM lead nowhere by mid-October.
After an enthusiastic start and media frenzy over such a major shake-up in the global car sector, Ghosn and GM chairman Rick Wagoner have been taking a cautious line, the news agency said. Ghosn has said any decision depends on the amount of synergies that can be realised, while Wagoner is focusing on restructuring.
Deutsche Bank analyst Rod Lache also told Reuters that a deal with Ford would create more value: "We believe Ford's purchasing is relatively inefficient - an area where Renault/Nissan has substantial expertise. There could also be benefits should investment-grade partners get involved in co-ownership of the Ford Credit business," he said.
Reuters noted that Ford's interest in an alliance is no secret given its mounting losses and dwindling market share in North America amid slumping demand for pickup trucks and sport utility vehicles - Bill Ford said his group was open to an alliance deal after the announcement of talks between GM and Renault-Nissan.
Ford has also acknowledged courting Ghosn for a senior post at Ford in Dearborn, but Ghosn, a Brazil-born Frenchman of Lebanese parents, declined, the report added.
One investment banker who follows the sector closely told Reuters recently a Renault-Nissan link with Ford would be simpler and more effective than one with GM because there would be less overlap of brands.
"I'm sure that if Carlos Ghosn doesn't succeed with General Motors he will look at Ford or one of the other players," the banker reportedly said, although the strong influence the Ford family exercises at the company could pose an obstacle.
Solaro reportedly reckoned that could be overcome, however. Renault was likely to want a equity stake in Ford, in line with its stake in Nissan and reports of intentions to take a stake in GM in case of an alliance deal.
In that case it would probably want the same power as the Ford family which at the moment has 40% of the votes with about 4% of the capital. Deutsche Bank's Lache told Reuters that this problem was not insurmountable, either.