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Spokane, Washington  Est. May 19, 1883

GM talks continue in Paris


An automall in Batavia, Ohio, sells Nissan, Mazda, and General Motors vehicles. Executives representing all three automakers met in Paris on Wednesday and agreed to continue discussions on a possible three-way global car making alliance.  
 (Associated Press / The Spokesman-Review)
From Wire Reports The Spokesman-Review

PARIS — General Motors Corp. Chief Executive Rick Wagoner and Carlos Ghosn, who heads Renault SA and Nissan Motor Co., met in Paris on Wednesday and agreed to continue discussions on a possible three-way global car making alliance despite signs the talks are running into difficulties.

In a joint statement, the three companies said their negotiators “continue to explore the potential opportunities of an industrial alliance.”

Renault and GM representatives declined to comment on whether the meeting had addressed differences between Ghosn and Wagoner over how much each side’s shareholders would stand to benefit from an alliance.

According to a report in The Wall Street Journal, Wagoner is pressing Ghosn for a multibillion dollar payment to GM as part of any alliance deal, insisting that his shareholders would otherwise be shortchanged.

Brian Akre, a spokesman for the U.S. automaker, declined to discuss the content of the talks but said that GM believed that “the benefit from the synergies that have been discussed are disproportionate.”

He added: “GM would be looking at ways to alleviate that concern. Speaking hypothetically, that could include a payment, that could include a number of different options.”

Speaking at an investor conference Tuesday, GM Chief Financial Officer Fritz Henderson said the company was committed to an objective assessment of the value of synergies to be gained, “and more importantly, determining which partners get which benefits.”

Both sides have set a deadline of Oct. 15 to decide whether to press ahead with detailed negotiations on a possible extension of the existing Renault-Nissan alliance to include GM.

Uncertainty over the outcome could overshadow the new automobile models and glitzy concept cars on display when the Paris Motor Show opens its doors to the media on Thursday.

In July, Detroit-based GM, France’s Renault and Japan’s Nissan agreed to conduct a 90-day review of the potential benefits of an alliance that could create an auto giant with a combined annual production of 15 million vehicles.

The study came after GM shareholder Kirk Kerkorian, who owns a 9.9 percent stake in the automaker, called for the companies to pursue an alliance.

GM has been stumbling amid intense competition from Asian rivals. It has announced plans to close 12 plants by 2008, slash its work force and cut costs.