OCTOBER 5, 2006

The end of the Renault dream?

Renault, Nissan and GM have terminated their discussions about a global alliance, bringing to an end the French company's hopes of propelling itself into the big league in America by effectively taking over the management of General Motors. All parties involved in the talks agreed that there would "significant aggregate synergies" if the three firms were in an alliance but they could not agree on the terms of a deal. It remains to be seen what Renault will now do but there is a possibility that there could be similar discussions with the Ford Motor Company, which needs just as much help as GM.

Carlos Ghosn, chief executive of Renault and Nissan, has made it very clear that he wants to add a US firm to the Renault-Nissan alliance and Ford chairman Bill Ford Jr has a very high regard for Ghosn and has tried to hire him on several occasions. Things are a little different now that Ford has restructured the top management, bringing in Boeing executive Alan Mulally to run the show. In the interim there is plenty to do to keep Renault and Nissan successful. Renault has struggled of late but Nissan's success has balanced the books, although getting a bigger share of the US market remains a big goal.