Renault Chief May Look to Ford if G.M. Talks Fail

PARIS, Sept. 27 — Carlos Ghosn, who runs the French automaker Renault and Nissan of Japan, said today that he would continue to seek a North American partner if negotiations on an alliance with General Motors fail — raising the prospect of eventual talks with the Ford Motor Company.
Mr. Ghosn’s comments came hours after he met with General Motors’ chief executive, Rick Wagoner, for the first time since their two companies formally began negotiations in July on a possible three-way alliance.
Following today’s meeting at Renault’s headquarters in the Paris suburb of Boulogne-Billancourt, the automakers issued a joint statement saying that “our companies continue to explore the potential opportunities of an industrial alliance.” They said study teams created to analyze a deal would work through mid-October.
Speaking later to an automotive conference on the eve of the Paris Motor Show, Mr. Ghosn said that adding a North American partner “makes sense” for the Renault-Nissan alliance, which began in 1999.
But in recent weeks, G.M. executives have expressed doubts over the value of a combination with Renault and Nissan. G.M., which lost $10.6 billion last year, is in the midst of an extensive restructuring that it says will make it more competitive on its own.
The only other independent North American candidate for Mr. Ghosn would be Ford, which is also facing a deep financial crisis. Its chairman, William Clay Ford Jr. , called Mr. Ghosn soon after hearing about the G.M. talks this summer and suggested that his company speak with Renault and Nissan if the G.M. deal does not take place. But Mr. Ford, who has said he speaks to Mr. Ghosn frequently, has said the company’s first priority is its own restructuring.
Mr. Ghosn said the negotiations with G.M. would continue until mid-October, but not beyond that point. “In the middle of October, you will have a decision whether we go or stop,” he said. Asked whether he would continue to seek a North American partner if the G.M. talks do not bear fruit, he responded, “You’re totally right.”
Mr. Ghosn continued: “The expansion of the alliance to a North American partner makes sense. We are trying to be as straightforward as possible. The time frame is limited. If it’s yes, we will proceed. If it’s no, we will see.”
The Wall Street Journal reported today that G.M. may demand that Renault and Nissan put up several billion dollars as an “equalizing contribution.” G.M., the world’s biggest auto company, would seek the payment because it believes it brings more value to the deal than the other two, according to the report.
Renault and Nissan declined comment.
But people with direct knowledge of executives’ thinking expressed skepticism, saying that to provide G.M. with the equivalent of a dowry would be a sign of desperation on Mr. Ghosn’s part. Those people insisted on anonymity because of the sensitivity of the talks.
Nissan executives were admittedly stunned by the report in The Journal. “It woke us up,” said Dominique Thorman, an executive vice president at Nissan North America and one of Mr. Ghosn’s closest associates.
For a similar investment, Renault and Nissan could purchase a stake in another company and perhaps even get controlling interest, analysts said.
Renault paid about $5.4 billion in 1999 for a 44 percent stake in Nissan, which was then saddled with heavy debt and slumping sales. Renault’s stake is now worth more than $20 billion, after a sharp turnaround led by Mr. Ghosn.
Early on in the Nissan-Renault alliance, Mr. Ghosn said the French automaker might resume selling cars in North America. It has not marketed its vehicles there for more than a decade.
Mr. Ghosn told the automotive conference today that if the companies found a North American partner, there could be opportunities for Renault to return to the world’s biggest car market.
He also addressed critics who have wondered why his automakers are seeking a North American partner when Renault itself is in the midst of a turnaround, its second in the last decade, and Nissan’s performance has faltered since peaking two years ago.
“People still are worried that Nissan is not in good shape,” he said, acknowledging that Nissan’s operating profit margins have dropped to 8 percent from 11 percent.
But in an apparent jab at G.M., he added: “People would love to have 8 percent.” GM continues to lose money in North America, although at a far slower rate than last year.
“Some would say this is not the right moment,” Mr. Ghosn said. But he added that as chief executive of the two companies, “I can not ignore an opportunity when it comes. Then you sell it to your board and get it approved by shareholders.”
Mr. Ghosn has made no secret of his wish to expand the alliance, in an effort to broaden its clout and compete with Toyota, the world’s second-biggest automaker behind G.M.
Mr. Ghosn and Mr. Wagoner agreed on July 14 to begin “exploratory talks” with Renault and Nissan at the suggestion of GM’s biggest shareholder, the billionaire Kirk Kerkorian, whose associates had voiced frustration with the pace of G.M.’s restructuring efforts. G.M. announced a plan 10 months ago that would cut 30,000 jobs and close all or parts of a dozen plants.
Mr. Wagoner and Mr. Ghosn agreed to hold discussions for 90 days.
Mr. Ghosn has said the three-way alliance would create a powerful automotive force, with operations based on three continents. G.M., however, has maintained that it does not need an alliance to bring about its turnaround efforts.
Both companies have said that the talks would continue through the Oct. 14 deadline. But a number of news reports in recent weeks have suggested that the talks are stalled.
Patrick Pelata, a close aide to Mr. Ghosn and the head of product development at Nissan, said Monday that G.M. was skeptical about the possible savings and efficiencies that Renault and Nissan maintained a combination would provide.
Nonetheless, Mr. Pelata, who has led the Renault/Nissan team during the talks, said he had urged G.M. to move forward with the project as a way to fend off Toyota, which is poised to pass G.M. and become the world’s biggest auto company, perhaps as soon as this year.
Frederick Henderson, G.M.’s chief financial officer, said Tuesday that the company would continue a “thoughtful, thorough and objective assessment” of a possible alliance, but emphasized that such an alliance it would have to provide value to GM shareholders.