Rick Wagoner was declared the winner in the first round of a chess match with Kirk Kerkorian that will determine the future of General Motors.

Kerkorian and aide-de-camp Jerry York want to link GM with Renault-Nissan - and Carlos Ghosn. GM's board on Friday authorised executives to study the proposed link and report back to directors - expressing support of the turnaround plan Wagoner has put in place.

The alternative would have been to form an independent board committee to study the matter - the result Kerkorian sought. Instead, the prospects will be viewed through Wagoner's prism.

But the celebrating among GM's senior management last weekend (muted thought it was) could be premature.

The key is not that Kerkorian - billionaire owner of a 10% stake in GM - wants a deal. Rather, it is that Carlos Ghosn probably does.

Ghosn's stature is such that if he wants a deal he will probably get one. And as a minority agitator he would make Kerkorian look like a silent partner.

The fireworks begin this Friday when Ghosn and Wagoner meet in Detroit to start discussing a possible alliance.

Sources say the Renault-Nissan CEO is seriously underwhelmed by how Ford and GM are run - and believes he can do better. His theme has been accountability. Privately, Ghosn has asked why shareholders do not demand more from Detroit's top executives.

Ghosn turned down an offer to run Ford - refusing to accept a CEO role in a family-controlled company, the situation he once found himself in at Michelin.

And he would not agree to become GM's CEO unless he was able to bring Renault and Nissan along with him.

Ghosn is not looking for a bigger job, he is building a bigger empire. One rumour circulating in Detroit is that in such a new combine, Ghosn himself would receive a tidy ownership stake awarded by Kerkorian.

GM senior managers oppose the tie-up, make no mistake, but were loath to say so publicly last week. They are anxious not to create an opening for Kerkorian to claim, indignantly, that his idea is not being taken seriously.

Their strategy is a delicate denunciation of the scheme; an attempt to quietly build a groundswell of opposition on the merits that will begin to colour Wall Street's thinking.

GM managers cannot be as boldly upfront in their opposition as Bob Eaton was when Kerkorian and Lee Iacocca moved on Chrysler 12 years ago. At that time, Chrysler and Eaton were held in the highest esteem, and Kerkorian and Iacocca were painted as destructive and greedy.

Then, as now, leading GM's public defence is PR wizard Steve Harris, who was at Chrysler in the mid-90s. Harris, as much as Wagoner, is Kerkorian's opponent in the chess match.

His strategy is to engender talk is that there are no practical reasons to align. For example, the consensus in Detroit is that GM purchasing would not benefit from the Renault-Nissan attachment. GM already has ultimate buying-power leverage and has access to any supplier in the world it wants.

Yet joint purchasing was one of the highlights of Renault's alignment with Nissan in 1998. Not just because it created new economies of scale, but because of the deep influence of Nissan's style of supplier relationships on Renault's parts-buying operations. Then-Renault purchasing chief Jean-Baptiste Duzan enthusiastically adopted Japanese methods instead of imposing his own.

It was one of the unheralded strokes of genius in that alliance.

Edmund Chew - SupplierBusiness.com

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