The Times
October 06, 2006

Renault-Nissan looks to Ford in quest for US tie-up

From Tom Bawden in New York

RENAULT-NISSAN turned the focus of its intentions to Ford yesterday as it signalled a determination to link up with a partner after the breakdown of talks with General Motors (GM).

The Franco-Japanese alliance, whose talks with GM failed on Wednesday, said that a North American partner remained the highest priority.

A spokeswoman for Renault said: “We remain convinced that the Renault-Nissan alliance could be extended to work with additional partners. From a strategic perspective and under the right conditions a North American partner could make sense.”

Ford is the last potential partner among the top three American carmakers, as Chrysler is now part of the German-US DaimlerChrysler group.

Toshiyuki Shiga, a senior Nissan executive, had earlier said that it would be “natural” to extend the alliance with Renault to include a North American company.

Ford declined to comment on the possibility of a tie-up. Three months ago Bill Ford, then the chairman and chief executive of Ford, approached Carlos Ghosn, head of Renault-Nissan, about a possible partnership in the event that the alliance’s talks with GM broke down.

But Mr Ford has since hired Alan Mulally from Boeing to be his chief executive, and analysts believe that it is unlikely that his new recruit would launch straight into merger talks with any of its competitors.

The talks between GM and the alliance, in what would have created the world’s biggest carmaking concern, collapsed on Wednesday after the two parties failed to agree the financing of a deal.

Renault had wanted a 20 per cent stake in GM, but the American carmaker said that it wanted compensation of several billion dollars.

It argued that most of the first significant savings of a merger would go to Renault. Renault said that a payment to GM would be “contrary to the spirit of any successful alliance”.