Blog: Dave LeggettGM-Renault-Nissan

Dave Leggett | 3 July 2006

One of the reasons that the Renault-Nissan alliance works is that the two makers have been able to work together without getting in each other’s hair too much (and also, let’s not forget, Nissan was in a desperate state financially when Renault came along, offering to sort out the debt mountain).

Nissan is strong in Japan and the US. Renault is a big player in Europe and South America. They have kept off each other’s toes in Asia. The alliance between the two was never an outright takeover of Nissan by Renault – that wouldn’t have washed in Japan.

And there have been savings in development costs through platform consolidation between the two; procurement savings have also been a feature. It’s been well managed.

But just imagine adding GM into the R-N alliance mix in Europe. Consolidating major platforms and integrating product development strategies would be a highly political and fraught process for both GM and Renault.

And it wasn’t so long ago that GM opted to dump Fiat and go-it-alone. Utilising GM-Daewoo for the development of low-cost products sold under the Chevrolet badge globally seems to many to be a smart move. How would that sit in the GM-Ren-Niss alliance?

Does GM need to do this in order to compete with Toyota? I don't think so, unless the cash situation is worse than it appears, or heading that way. Having an alliance with Renault doesn’t help the structural problems for GM in North America unless, arguably, GM's existing management is turfed out wholesale so that a real revolution can happen. 

Perhaps Kerkorian is attracted to the idea that Ghosn has the Midas touch and can turn car companies around where no-one else can. Ghosn’s record is indeed pretty good, but Nissan isn’t doing so well lately and there is a school of thought that the Renault-Nissan alliance has mainly exploited low-hanging fruit, with more difficult integration issues side-stepped or put off.

Or maybe this is more about ruffling some feathers in the GM boardroom. Hard to say how much that is a driver, but Kerkorian doesn’t have a problem with turning up the heat in GM's boardroom. (And what about the political background at Renault? Maybe this is a way for Ghosn to say that Renault must cut more cost at home?)

If a proposed alliance involving GM is a loose one with respective platforms, shared architectures and other sacred cows left largely untouched, then the question will be asked: what’s the point? For this to work, some radical surgery has to follow.

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