By Sholnn Freeman
Washington Post Staff Writer
Tuesday, September 26, 2006; D06
PARIS, Sept. 25 -- General Motors Corp. ought to enter an alliance with Nissan Motor Co. and Renault SA as a defense against the rising global dominance of Toyota Motor Corp., a top Renault executive said Monday.
"What are they going to do about Toyota?" said Patrick Pelata, executive vice president of Renault, in a briefing with reporters. "What are we going to do, and what is GM going to do? Are we just going to say they're going to be winners?"
Pelata said GM needs to recognize the urgency of battling Toyota. The Japanese company is on the verge of overtaking GM as the world's largest automaker within several years, analysts have predicted.
GM's "competition is not Nissan. It's not Renault. It is Toyota," Pelata said. Toyota last week increased its profit forecast for the first half of 2006 and its sales goals for the next two years.
The automaker has steadily expanded its U.S. operations, including new production of pickup trucks and hybrid cars. Nissan has long had an intense rivalry with Toyota in Japan, and both have big ambitions in global markets.
Pelata, who is a participant in the alliance talks, said he saw enough synergies among Nissan, Renault and GM to justify a partnership.
A spokesman for GM had no comment. A Toyota spokesman also declined to comment.
Carlos Ghosn, chief executive of both Renault and Nissan, and G. Richard Wagoner Jr., chairman and chief executive of GM, are to meet here this week to review progress on the talks, said Frederique Le Greves, the top communications official for Nissan's North American operations. The executives will study the progress of 10 teams set up to search for areas of cooperation and cost savings among the three companies, she said.
Recent media reports from Detroit have suggested that the talks have stalled and that the automakers have not found many areas of compatibility. Ghosn has said all along that an alliance can't be had if GM management is opposed.
The talks began in July at the insistence of Jerome B. York, a GM board member and associate of billionaire Kirk Kerkorian, who owns 9.9 percent of GM. York, who was installed on the board last year, has called for deeper changes than GM's management originally planned. York has asserted that "time is of the essence" for the world's No. 1 automaker, which lost $10.6 billion in 2005.
GM's performance has improved so far this year, and Wagoner has said the company is on track to fix its many problems and return to profitability.
Wagoner and Ghosn's meeting comes the same week as the Paris Motor Show. Renault officials are offering tours of their operations to the U.S. press to show off what they say is the successful cooperation between Nissan and Renault. The two automakers linked up in 1999.
Asked if it would be a loss or failure for Ghosn if a major deal with GM does not materialize, Le Greves said: "Is it a failure? A failure for who?"
She said Nissan was open to potential discussions with Ford Motor Co. in the event that no deal is struck with GM, but she added that Nissan and Renault remain committed to finishing talks with GM first. "If GM doesn't happen, if Ford is interested, why not?" she said.