Will Toyota make a play for GM?

[Plex]

Toyota may be considering foiling Renault-Nissan by making a surprise move to hookup with GM.

By BusinessWeek
Could Renault and Nissan have a competitor in their effort to form an alliance with General Motors? Top executives at Toyota Motor are mulling their own overture to GM to head off rival Nissan from forging an alliance that could help the Japanese-French car company, according to people with knowledge of the Japanese auto maker's plans.

General Motors' (GM, news, msgs) Chairman and CEO G. Richard Wagoner Jr. met with Carlos Ghosn, chief executive of Nissan (NSANY, news, msgs) and Renault, in Detroit on Friday, to discuss how the three auto companies might pursue an alliance.

Both companies issued a joint statement saying they will take about 90 days to explore potential benefits of an alliance.

If Wagoner decides to move ahead, GM and Renault-Nissan could join together in an alliance that would give Ghosn's company a 20% stake in GM. The allied companies could then share engines, platforms, and other parts. If Wagoner doesn't want to sell Renault an equity stake, the three auto giants could just form some joint ventures and still combine their engineering capabilities.


Backlash fears
Sources close to Toyota (TM, news, msgs) say the company is considering its options and looking at different opportunities that they could propose to GM. "Toyota has no interest in seeing an alliance like this (linking Renault, Nissan and GM) take place," said an executive who asked not to be identified.

One Toyota source says the company has "war-gamed" a way to assist GM. Despite Toyota's juggernaut-like growth, which has resulted in the company increasing its U.S. market share from 9.3% in 2000 to 14.6% today and earning in excess of $10 billion a year the past three years, the company fears the kind of social and political backlash that could come if General Motors falls apart.

Whether Toyota actually makes a bid remains to be seen. Several GM executives have said the company has heard nothing from the Japanese auto maker. And Toyota spokesman Steven Curtis said any talk of an offer from the company is "pure speculation."


Washington testimony
One source familiar with Toyota's strategy said that an equity tie-up like the one GM investor Kirk Kerkorian has proposed between GM and Renault-Nissan would be unlikely. "It's not in their culture," he said.

General Motors and Toyota have long worked together, albeit in a limited way. The two jointly operate an assembly plant in Freemont, Calif., where the Toyota Corolla, Matrix, and Tacoma pickup are assembled under the same roof as the Pontiac Vibe.

Wagoner was in Washington D.C. on July 13 testifying before Congress about health-care policy. In a gathering of reporters, he hinted that a deal with another automaker besides Renault-Nissan was possible, according to Automotive News. "Could other things arise?" he said to Automotive News. "Sure, they could happen any time, but nothing else I can talk to you about today." Wagoner also said that a possible, even desirable, outcome could be no deal at all.

Toyota's interest in GM could make for a desirable solution for the GM chairman. GM executives see the Renault-Nissan alliance as a play by Kerkorian -- GM's fourth-largest shareholder, with 10% of the stock -- to get Carlos Ghosn into the driver's seat at GM.


Dubious synergies
That's one reason executives have been skeptical about a tie-up with Renault-Nissan. Other executives have said that they aren't sure the synergies would really be worth selling 20% of the company. Nor would they solve some of GM's long-term issues, such as rising health-care costs, falling market share, and the company's battle to buoy sport-utility vehicle profits while gasoline prices rise.

Still, even if GM and Renault-Nissan strike some kind of alliance, Ghosn may not be seeking to replace Wagoner. In an interview on Capitol Hill on July 13 Ghosn told Bloomberg "I don't need it," in reference to the top job at GM.

Given the companies' history, it is possible that Toyota could make GM an offer of expanding joint ventures, and even sharing technology and vehicle development, without buying an equity stake. While other auto makers have merged or struck alliances that involve equity swaps, Toyota has steered clear of such deals. GM, meanwhile, has recently been unwinding several mostly unsuccessful joint ventures it struck with Fiat (FIA, news, msgs), Suzuki (SZKMF, news, msgs), Isuzu (ISUZY, news, msgs)and Fuji Heavy Industries (FUJHY, news, msgs).

Discussions of an alliance with Nissan-Renault were sparked by Kerkorian's Tracinda and its GM board representative Jerome B. York. Tracinda has been trying to pressure Wagoner to move faster in restructuring the auto maker. The billionaire's company publicly announced on June 30 that the Japanese-French auto maker was interested in pursuing alliance talks.

Wagoner then formed an internal committee to study the merits of the proposal.

If Toyota is serious, Wagoner will have another one to study pretty soon.


http://articles.moneycentral.msn.com/Investing/Extra/WillToyotaMakeAPlayForGM.aspx?GT1=8380

[MG Man]

**sigh**
if only I had more money in my piggy bank to buy out Vauxhall b4 GM makes a complete hash of things
_________________

I know it's so, for I told me so

[Yeo]

Toyota remains on its own
WASHINGTON -- The head of Toyota Motor Corp.'s U.S. business Monday said the world's most profitable automaker has no interest in wading into talks among General Motors Corp., Renault SA and Nissan Motor Co. over a possible alliance.

"I can promise you there's been no discussions or meetings in our offices and the best I can tell anywhere else in Toyota," Jim Press, president of Toyota Motor North America Inc., said.

A report over the weekend had suggested that Toyota would be concerned about Nissan and Renault linking up in some fashion with GM and would consider making some kind of offer itself. GM Chairman Rick Wagoner and Carlos Ghosn, chief executive of Renault and Nissan, agreed Friday to study a possible alliance for 90 days.

But Press said Toyota is busy managing its own fast-growing business and that the idea of Toyota trying to buy GM is nothing more than rumor.

"This is an outgrowth of the growing levels of competitiveness in the industry and the high levels of investment for new technology," he said.

GM and Toyota jointly run a factory in Fremont, Calif., and have been partners in several smaller joint ventures, including research into fuel cells. But the two are direct competitors on most continents, going head-to-head not just in North America but in Europe, South America and China.

While GM struggles to cut costs, close plants and shed thousands of workers after losing $10.6 billion last year, Toyota could take GM's title of world's largest automaker as soon as this year. It expects its global sales to rise 6% to 8.45 million vehicles this fiscal year, and had nearly $14 billion in cash on hand as of April.

"If there's one company that could go it alone, it's Toyota," said John Casesa, managing partner at Casesa Strategic Advisors LLC in New York. "I don't think it feels compelled to get in the way of a GM-Renault-Nissan alliance."

Teams from GM, Renault and Nissan will spend the next three months privately studying the merits of a possible alliance among the three automakers. GM's largest individual investor, billionaire investor Kirk Kerkorian, proposed an alliance in public letters June 30.

Sources familiar with Kerkorian's thinking have said he was unhappy with Wagoner's pace in turning around GM after last year's loss, and many analysts have interpreted the move as an effort to install Ghosn as head of GM. Ghosn has denied any interest in Wagoner's job.

Robert Lutz, GM's vice chairman, said Monday that the automaker had already plotted out savings of billions of dollars in its vehicle development systems.

"We need to measure the synergies of a re-regionalization with Renault in Europe and Nissan in Asia with the gains from the globalization at GM," Lutz said in London during the introduction of the new Opel Corsa.

UAW President Ron Gettelfinger praised Wagoner for taking a cautious approach to the proposed alliance, saying he was concerned that joining the alliance would distract GM from its turnaround plan.

"We have sacrificed a lot to help this corporation turn themselves around, and if the focus is taken away from where they're headed right now ... and more focused on this alliance, I think that becomes a big issue as well," he said.

http://www.freep.com/apps/pbcs.dll/article?AID=/20060718/BUSINESS01/607180323/1014
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www.ttonline.org

[Plex]

a rumor now?