Toyota Execs Considering Alliance w/ GM
Toyota said to mull GM alliance
Report: Japanese automaker may foil Renault-Nissan with a surprise bid to hook up with GM.
July 16 2006: 12:18 PM EDT

NEW YORK (CNNMoney.com) -- Toyota's top execs are discussing putting out feelers to GM in a bid to form an alliance and head off rivals Nissan and Renault, a news report said Sunday.

Business Week magazine, quoting people with knowledge of the Japanese automaker's plans, said the company is mulling its options and considering different plans that could be proposed to General Motors (Charts), the world's largest but deeply troubled automaker.
The story quoted one Toyota (Charts) source saying that the company has "war-gamed" a way to help GM, since despite its rapid growth, much of that at the expense of General Motors, Toyota is concerned about the political and social backlash if GM falls apart.

It also said that an equity link, where Toyota and GM would buy stakes in each other, was unlikely.

The report noted that GM execs have said they haven't heard anything from the Japanese automaker, and it quoted Toyota spokesman Steven Curtis as saying any talk of an offer was "pure speculation."

The report comes two days after GM CEO Rick Wagoner and Nissan-Renault CEO Carlos Ghosn said they will work on a confidential review of the potential benefits of an alliance between the three automakers.

The review is expected to take about 90 days, the companies said after the CEOs met in Detroit for what the companies called an "exploratory discussion" about a possible alliance. (Full story).

The alliance between GM and Nissan-Renault was first suggested by Kirk Kerkorian, GM's largest individual shareholder who owns a 9.9 percent stake.

A number of industry analysts said Friday they think that alliance was unlikely. But they also said there are risks for GM in just holding talks with its potential partners, no matter what direction they go. (Full story).

GM, the world's largest automaker, is already taking steps to get back on track after it lost $10.6 billion last year. The company is cutting 30,000 hourly workers, closing a dozen plants and facilities and selling a stake in its GMAC finance unit.

But perhaps the biggest challenge facing GM is its need to develop new cars and light trucks that will attract buyers without resorting to big incentives. GM has seen its share of the U.S. market slide in recent years, as overseas automakers like Toyota, Honda and Nissan have gained.

Some kind of broader pact with Toyota could prove attractive to Wagoner, GM's CEO, as a possible foil to Ghosn and his two automakers. Indeed, some analysts believe that GM is proceeding with the exploratory talks with Nissan and Renault only because it has to.

"GM is a company that wants to get past this blind date they were set up on by Uncle Kirk and concentrate on their turnaround plan," Kevin Tynan, auto analyst for Argus Research, told CNNMoney.com Friday.

"There's obviously a myriad of issues there for them to concentrate on, and there's a lot more potential there [in the internal issues] than in an alliance," Tynan said.

Meanwhile, Ghosn said last week he doesn't want the top job at GM even if an alliance is struck between GM and Nissan-Renault. (Full story).

Ghosn, 52, was executive vice president of Renault for just over two years when he was named chief operating officer of Nissan in June 1999 at the start of the Nissan-Renault alliance. He was named CEO in of Nissan two years later, and is widely credited with pulling the automaker back from the brink of bankruptcy. He was named Renault CEO in April 2005.

Toyota and GM are already working together in a limited way. The two operate a joint assembly venture at a plant in Freemont, Calif.

 

Well these would be my last Lexus and BMW here I come if that happens.. I'd get a black one and wear shades all the time so I don't have to look at my car

 

I sure hope this doesn't happen

 

You actually think GM would have anything to bring to the table for Toyota? Although I wouldnt mind the STS-V motor inside a GS or something

 

Oh god... look what happened to Mercedes after the Chrysler merger.

 

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I hope Toyota is smart enough to stay far away from that mess known as GM.

If it ain't broke don't try to fix it!

 

Merger. Definately not. Both should be independent of one another as their basic business principles are greatly skewed.

Alliance. Maybe. There are some technologies that Toyota can use from GM, and vice versa. If they pay or exchange such technologies, it would benefit both companies. For example, check out how GM benefitted from using the Matrix to create the Vibe. Pontiac's most reliable car is actually a Toyota...

 

hhhmmm seems like Toyota is feeling some heat from Nissan/Renault...

 

http://www.msnbc.msn.com/id/13891086/

 

you should know by now we have car chat for things like this.

 

I don't think they would want to buy damaged goods.

Sam

 

Sounds like Toyota would do what it did with Fugi, but some stake in GM and use their plants

 

I hope this never happens. It would be good for GM but not for Toyota. Toyota is doing so well on it's own why would they pick up something that is so jacked up. GM is out dated and has way too many problems. Toyota please leave GM alone...

 

mmmm a Vett at the price of a corolla

 

I'd just settle for a Corvette with the build quality of a Corolla. I'd buy one