Any alliance between General Motors, Renault and Nissan arising from talks beginning this Friday will have to overcome opposition from powerful US lobby groups to succeed, a report said.
Go deeper with GlobalData
Reuters said union leaders and politicians are already coming out against the plan with the governor of auto making state Michigan and the president of the United Auto Workers union both claiming the proposals would lead to a further exodus of jobs from the US and should therefore be opposed.
“I’m in favour of Michigan winning. I’m in favour of jobs coming here. The concern is, that if it’s controlled by businesses on another continent or other continents, that we may end up on the losing end,” Michigan governor Jennifer Granholm was quoted as saying.
UAW leader Ron Gettelfinger added: “We’re seeing a further erosion of good jobs in this country should this deal come about,” he said. “The entire complexion of the auto industry in the future will be determined by this.”
However, he reportedly backed chief executive Rick Wagoner ahead of crucial discussions next year that will shape the contracts of union workers with the car maker.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataApparently referring to current restructuring, the union chief said Wagoner had done a “formidable job” at GM and noted: “I believe he has put in place a competent team.
“I do trust that Rick Wagoner and his team can get this behind him as quickly as possible and stay focused on what they were really starting to make inroads on, and that’s moving General Motors forward.”
Reuters said others, however, took a different view. UAW Lordstown office president Jim Graham, in Ohio, another state where many pay cheques come from making vehicles or their parts, reportedly said he was trying to be pragmatic: “In the global market that we’ve been thrust into I guess the more alliances you have, the better off you are.”
The report also noted that union leaders in Europe are also planning a series of meetings over the next few days to plan their opposition to a partnership they believe would see capacity cut and jobs shifted from western Europe to overseas.
Opel Bochum factory works council head Rainer Einenkel, who led a wildcat strike against cuts at GM Europe in 2004, told Reuters: “You don’t have to be a prophet to know that jobs are at risk. We have to expect the worst.”
The news agency noted that Morgan Stanley wrote in a report: “A Renault/Opel alliance runs into the same problem as any other two volume players getting together. The only rationale is massive capacity reduction.”
And market researcher Global Insight’s Christoph Stuermer reportedly said Opel could be in for rough times ahead, should Renault and Nissan, headed by chief executive Carlos Ghosn, bolster any co-operation by acquiring stakes in GM.
“If the three just co-operate on a project-by-project basis then GM Europe could pick and choose which one they want to co-operate on, but if Ghosn were to become a joint CEO of GM and Renault/Nissan, then things are going to become very hard for GM Europe,” he said.
However, as noted in other reports on just-auto this week, Reuters said some sceptics view such an expanded alliance as unlikely, believing the proposals from Kirk Kerkorian are just an attempt to pour pressure on GM because his investment in 9.9% of GM shares is currently loss-making.
Automotive Industry Data analyst Peter Schmidt told the news agency: “Nothing can be ruled out, but I see the chances at being no higher than 10%. If I were a Renault or Nissan shareholder, I’d put a gun to Ghosn’s head and say ‘Don’t you dare’.”
The report noted that GM’s board is currently stressing it is keen to press on with the restructuring currently under way.
