GM’s Wagoner talks about Nissan-Renault deal
. . . Chief executive says he’s not against alliance
DETROIT – General Motors Corp. Chairman and Chief Executive Rick Wagoner said Tuesday that he is not against a proposed alliance with Renault and Nissan.
“Nothing could be farther from the truth,” he said in a live interview on CNBC.
In his first interview since billionaire shareholder Kirk Kerkorian proposed an alliance between GM, Renault SA of France and Nissan Motor Co. of Japan, Wagoner said his mind is completely open but there aren’t enough details available yet to make a judgment.
“Our experiences with alliances — and we’ve had a lot of them over the years as you know — really gets into what kind of products can you share, what kind of powertrains can you share, where are there opportunities to work together in distribution, so you really need to get into the details,” he said from the lobby of GM’s Detroit headquarters.
Wagoner also said he has excellent support from the GM board of directors and that anyone who doesn’t think GM is moving fast enough on its turnaround plan is not looking at the facts. He said the company has cut more than $8 billion in structural costs over the past 12 to 14 months and is in the process of introducing many new products.
“I think this thing is coming around pretty quickly, to be honest,” he said during the wide-ranging interview on the network’s ’s “Kudlow & Company,” which lasted about 45 minutes.
Wagoner declined to comment to an Associated Press reporter after the CNBC appearance.
While on the air, he faced heavy questioning about upcoming contract talks with the United Auto Workers union, saying he preferred negotiation to confrontation.
When asked if GM would use Caterpillar Inc.’s strategy to force a strike and hire replacement workers in order to reduce high health care and other labor costs, Wagoner said the company has been successful at the bargaining table so far and he’s confident that further talks can bring more cost reductions.
“I think you’ve got to look at what’s been accomplished over the last six, seven, eight months and give credit to the UAW leadership. They’ve been willing to sit down and work on these programs with us,” Wagoner said.
Wagoner, under further questioning, said he was aware that hiring replacement workers had helped Caterpillar cut costs, but he said that’s not the only reason for the company’s success.
“Caterpillar has run their business very well in a number of ways,” he said.
He said GM’s current contract with the UAW doesn’t expire for more than a year, and during that time, the company would work with the union to address issues that hinder the company’s competitiveness.
“I don’t think it makes a lot of sense for me to be giving out a war cry of going out on strike,” he said. “What we’re going to try to do is work on fixing problems with them, and we’ve had some pretty good success.”
About 35,000 hourly workers recently agreed to retire or take buyouts, which Wagoner said will cost the company money but also allow it to restructure its costs, including a reduction in the number of hourly workers in the “jobs bank,” where laid-off workers get most of their pay and benefits even when they’re not working.
GM, which has announced plans to close 12 plants by 2008, lost $10.6 billion last year. It made a $445 million profit in the first quarter of 2006.
At first, Wagoner dodged questions about whether Kerkorian was out to remove him and whether he could work with Renault and Nissan CEO Carlos Ghosn, who analysts say would likely replace Wagoner if Nissan, Renault and Kerkorian’s Tracinda Corp. collectively become GM’s largest shareholder and use that power to oust him.
Wagoner later said he has not been told by Kerkorian or Jerome York, Tracinda’s representative on GM’s board, that they are unhappy with his performance. He said he has great respect for Ghosn.
“It’s not my experience to have trouble working with any other good business people,” Wagoner said.
On negotiations with Delphi and its unions about wage and benefit cuts and other reductions, Wagoner said they are making progress but it would be misleading to say an agreement was imminent.