General Motors has scrapped a potential alliance with Renault-Nissan after the two firms failed to agree on the benefits of the tie-in – and the costs involved.Renault-Nissan wanted to buy a 20 per cent stake in troubled GM, soon to be overtaken by Toyota as the world’s biggest car manufacturer. But it refused to pay any premium over the market price and GM, which was aware that a deal would prevent any alliances with other manufacturers in future, was unwilling to accept that.
GM’s chief executive Rick Wagoner told the Financial Times, “The value was heavily skewed towards Nissan.” But Renault-Nissan stated that “the principle of compensation is contrary to the spirit of any successful alliance”. It has also hinted that the two sides were divided on the total value of any deal.
The breakdown in talks leaves GM facing its financial woes alone, but with freedom to act as it sees fit. Renault-Nissan could now turn to talks with similarly-stricken Ford, although there the firm's chief Carlos Ghosn is likely to want a cooling-off period before any fresh discussions.